Project Administration Memorandum

Project Number: 40019 Loan Number: 2468

VIE: Health Care in the South Central Coast Region Project

The project administration memorandum is an active document, progressively updated and revised as necessary, particularly following any changes in project or program costs, scope, or implementation arrangements. This document, however, may not reflect the latest project or program changes. This PAM shall be read along with the Report and Recommendations of the President and Loan Agreement. This PAM incorporates agreements reached between SESS and Executing Agency as of 9 July 2010. In case of discrepancy, the Loan Agreement shall prevail.

Asian Development Bank

CURRENCY EQUIVALENTS (as of 29 September 2008)

Currency Unit – dong (D)

D1.00 = $0.0000602773 $1.00 = D16,590

ABBREVIATIONS

ADB – Asian Development Bank CDC – communicable disease control CHS – commune health station DPMC – district preventive medicine center EA – executing agency EARP – environmental assessment and review procedure GAP – gender action plan HCFP – health care funds for the poor HIV/AIDS – human immunodeficiency virus/acquired immunodeficiency syndrome HMIS – health management information system HRD – human resource development MDG – Millennium Development Goal MOH – Ministry of Health MTEF – medium-term expenditure framework PHB – provincial health bureau PHC – primary health care PMU – project management unit PPC – provincial people’s committee PPMU – provincial project management unit SCCR – south central coast region SGIA – second generation imprest account SMS – secondary medical school SOE – statement of expenditure VHW – village health worker WHO – World Health Organization

NOTES

(i) The fiscal year of the Government and its agencies ends on 31 December.

(ii) In this report, "$" refers to US dollars.

CONTENTS Page

MAP LOAN PROCESSING HISTORY ii DESIGN AND MONITORING FRAMEWORK iii I. PROJECT DESCRIPTION................................................................................................1

A. Project Area and Location 1 B. Impact and Outcome 1 C. Project Components 1 D. Special Features 3

II. COST ESTIMATES AND FINANCING PLAN. ................................................................ . 6 A. Detailed Cost Estimate 4 B. Financing Plan 5 C. Allocation of Loan Proceeds 5

III. IMPLEMENTATION ARRANGEMENTS....................................................................... … 6 IV. IMPLEMENTATION SCHEDULE…………………….……………………………………… 7 V. CONSULTANT RECRUITMENT........................................................................................7 VI. TRAINING………………………………………………………………………………………….7 VII. PROCUREMENT ...............................................................................................................7 VIII. DISBURSEMENT PROCEDURES…………………………………………………………… 7 IX. PROJECT PERFORMANCE MONITORING AND EVALUATION.....................................8 X. PROJECT REVIEW ...........................................................................................................8 XI. REPORTING REQUIREMENTS........................................................................................8 XII. ACCOUNTING AND AUDITING ........................................................................................8 XIII. MAJOR LOAN COVENANTS ............................................................................................9 XIV. KEY PERSONS INVOLVED IN THE PROJECT................................................................9 XV. ADB ANTICORRUPTION POLICY ..................................................................................10

APPENDIXES 1. Summary Poverty Reduction and Social Strategy ............................................................13 2. Ethnic Minority Issues and Action Framework ..................................................................16 3. Gender Action Plan...........................................................................................................23 4. Detailed Cost Estimates....................................................................................................27 5. Project Management and Implementation Structure.........................................................30 6. Implementation Schedule .................................................................................................31 7. Procurement Plan .............................................................................................................32 8. Procurement Procedures ..................................................................................................36 9. Indicative List of Training Activities ...................................................................................39 10. Summary of Contract ........................................................................................................40 11. Disbursement Modalities ..................................................................................................41 12. Suggested Outline for Quarterly Progress Reports ..........................................................47 13. Framework and Guidelines in Calculating Project Progress ............................................49 14. Percentage of Project Implementation Progress .............................................................52 15. Project Completion Report Format ...................................................................................53 16. Financial Reporting and Auditing Requirements...............................................................58 17. Loan Covenants................................................................................................................61 18. List of ADB Reference Materials issued to PMU ..............................................................62

LOAN PROCESSING HISTORY Date(s) a. Approval of Project Preparatory Technical Assistance 24 October 2006 b. Fact-Finding 30 July to 11 August 2007 c. Management Review Meeting (MRM) 31 October 2007 d. Appraisal Mission 18 February to 4 March 2008 e. Staff Review Committee (SRC) 20 May 2008 f. Loan Negotiations 15 September 2008 g. Board Circulation 17 October 2008 h. Board Consideration and Approval 7 November 2008 i. Loan Agreement Signing 16 December 2008 j. Loan Effectiveness, including Conditions 20 March 2009 k. Physical Completion Date 31 December 2013 l. Loan Closing Date 30 June 2014

DESIGN AND MONITORING FRAMEWORK

Design Summary

Performance

Targets/Indicators

Data Sources/Reporting

Mechanisms

Assumptions

and Risks Impact Improved health status of the population, in particular the poor, women and children, and ethnic minorities in the south central coast region

Between 2009 and 2013: • Infant mortality rate

reduced by 15% overall and 30% among ethnic minorities (from 19 to 16 overall and from 42 to 29 in poor ethnic minorities per 1,000 live births).

• Annual maternal deaths reduced from 245 to 208 overall and from 62 to 43 in ethnic minority women.

• Health statistics

profile 2002–2006 • Provincial health

surveys 2009, 2013

• Annual report of vital statistics

• Monitoring of vital events in ethnic minority communes

Assumption • Health services are

appropriate to the needs of the poor and of high quality.

Risk • Escalating cost of living and

direct and indirect cost of health services restrain the poor from using the health services.

Outcome More comprehensive, well-managed, and better-used provincial health systems in the eight provinces, with a focus on health care for the poor, women and children, and ethnic minorities

Between 2009 and 2013: • Use of health services by

the population in general increased by 15%, and by the poor, women, and ethnic minorities increased by 30%.

• Poor pregnant women delivering in health facilities increased from 42% to 48%.

• Hospital case fatality rate reduced by 10% for all income groups.

• Use of health insurance fund by ethnic minorities increased by 25%.

• Provincial health

services and hospital statistics

• Provincial and hospital health services surveys

Assumptions • The provinces give priority

to health care for the poor, women and children, and ethnic groups.

• Investments result in better quality of health services.

• Strong demand for services from the poor, in particular ethnic women.

Risk • Financial support for rural

health services declines.

Outputs Output 1: Improved Health Facilities 1.1 New and upgraded

health facilities and equipment

1.2 Improved water,

sanitation, and waste management

By 2012: • 8 new and 18 upgraded

health facilities • District hospitals with

capacity for emergency obstetric care increased by 2 per province.

• All new and upgraded facilities meet MOH service standards for water, sanitation, and waste management.

• Engineer’s report • Hospital statistics • Engineer’s report

Assumptions • Provincial Governments

provide counterpart funds. • Investments are

appropriate to the needs. Risks • Price increases due to

delays in consulting. services and contracting

• Technical feasibility of waste management

• Purchase of inappropriate equipment

Output 2: Strengthened Provincial HRD

2.1 Improved provincial

human resource planning and management

2.2 Improved provincial

training capacity

By 2009: • Provincial HRD plans

approved, especially the training of women and ethnic minorities

• 88 master and 415 core trainers applying skills-based training

• Provincial HRD

plan

Assumptions • Provinces have an interest

in, and capacity to prepare HRD plans.

• Sufficient number of master trainers can be identified.

• Trainers adopt skills-based training approach.

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Design Summary

Performance

Targets/Indicators

Data Sources/Reporting

Mechanisms

Assumptions

and Risks 2.3 Improved quality and

availability of staff 2.4 HRD provincial studies

are used in policy formulation.

By 2010: • Every CHS has at least

one trained female staff member.

By 2012: • Number of qualified female

ethnic minority health care professionals increased by 50%.

• HRD studies (10), including at least two focusing on gender and ethnic minority issues, are shared and discussed by MOH.

• Provincial HRD

plan • Provincial HRD

plan • Assessment by

experts

• Female staff willing to work

in CHS for low pay. • Staff training results in

more competent staff. • Female ethnic minority

candidates qualify for scholarships (if necessary, with bridging).

• Study proposals are of satisfactory quality.

Risk • Further disparities between

public and private wage levels

Output 3: Improved Access to Health Care for the Poor 3.1 Better village health

care in remote communes

3.2 Health and nutrition

promoted in ethnic minority communes.

3.3 Reduced barriers to

health care funds for the poor

By 2013: • At least 95% of 423 poor

communes have at least one female skilled staff.

• At least 80% of trained VHWs provide standard package of reproductive health care.

• At least half of women of 100 ethnic minority communes participated in health and nutrition promotion campaigns.

• Ethnic minorities that know how to use insurance card increased by 50%.

• Health services

survey (for village level)

• Health services survey (for village level)

• Household survey

Assumptions • Communes have active

health committees. • Suitable candidates can be

identified as female or male VHWs and have time and resources to work as such.

• VHWs are competent. • Health and nutrition

promotion campaign is effective.

Risk • Other impediments prevent

the poor from access the funds.

Output 4: Strengthened Provincial Health Systems 4.1 Strengthened

provincial health systems management

4.2 Strengthened hospital

management 4.3 Better health

management information systems

4.4 Effective project

management support

By 2010: • Provinces prepare quality

provincial health plans and budgets based on agreed standard criteria.

By 2012: • Health system and hospital

managers comprise at least 25% females and have been trained in planning and management.

• Half of district hospitals have computerized health management information systems.

From 2009 onwards: Project procurement and financing management meet ADB standards.

• Provincial health

plans and budgets • HRD plan and

training assessment

• Hospital reports • Quarterly report

Assumptions • Provincial health officers

and hospital managers apply management skills.

• MOH strongly supports improved provincial and hospital management.

• Managers have access to web information resources.

Risks • Financial incentives for

investment in expensive medical technology.

• Limited capacity to maintain computerized systems.

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Design Summary

Performance

Targets/Indicators

Data Sources/Reporting

Mechanisms

Assumptions

and Risks Activities with Milestones Output 1: Improved Health Facilities (base cost: $52.9 million) 1.1.1 Resettlement by 2009. 1.1.2 Revision of hospital design and service standards by 2009. 1.1.3 Construction design and bidding by 2011. 1.1.4 New construction of 8 health facilities, including 1 regional and 1 district hospital,

1 SMS, and 5 DPMCs; and upgrading of 18 health facilities, including 1 provincial, 4 regional, 11 districts, 1 rehabilitation, and 1 traditional hospital by 2012.

1.1.5 Preparing equipment list and bidding by 2011. 1.1.6 Procurement of equipment and training for 31 health facilities by 2013. 1.2.1 Improving hospital water, sanitation, and waste management systems in 26

targeted health facilities by 2012. 1.2.2 Waste management training by 2012. Output 2: Strengthened Provincial Human Resources (base cost: $6.2 million) 2.1.1 Provincial teams conduct workshops and field visits to develop provincial HRD

plans annually. 2.2.1 Conduct of teacher training for better skills-based training methods at SMSs by

annually, with support of external teachers. 2.3.1 In-service training for totals of 3,000 district staff and 3,500 CHS staff by 2013. 2.3.2 Merit-based scholarships for teachers, nurses, paramedics, doctors, and managers

by 2013. 2.3.3 Ethnic minority scholarships for preservice training (160), at least 60% to ethnic

minorities, 50% to women, by 2013. 2.4.1 Field-based HRD studies on topics aimed at improving health care for the poor,

women, children, and ethnic minorities, completed by 2012. Output 3: Improved Access to Health Care for the Poor (base cost: $6.2 million) 3.1.1 Design of village health worker training. 3.1.2 Training of district and CHS staff. 3.1.3 Retraining 6,500 VHWs, 1 female and 1 male, for 423 remote communes, by 2013. 3.1.4 New training of 1,600 VHWs for remote communes, where required, by 2012. 3.2.1 Design of health and nutrition promotion program by 2009. 3.2.2 Community-based health and nutrition promotion using a NGO and targeting 100

ethnic communes, in particular to improve reproductive health, by 2012. 3.3.1 Education campaign for 100 ethnic minority communes to better use the health

care funds for the poor, by 2011. 3.3.2 System development and training for better fund management, by 2011. Output 4: Strengthened Provincial Health Systems (base cost: $4.3 million) 4.1.1 Update provincial health management manual, by 2009. 4.1.2 Provincial health manager training, by 2011. 4.1.3 Provincial health accounts, in 2009 and 2013. 4.2.1 Introduction of new management standards for hospitals, by 2010. 4.2.2 Hospital manager training, by 2012. 4.3.1 Improving HMIS design by 2009. 4.3.2 Training of 800 staff in HMIS, by 2011. 4.4.1 Provincial health system gender action plan and ethnic minority development plan

are part of the provincial 5-year and annual plans from July 2009 onwards, and their implementation is coordinated and monitored by the provincial health bureaus.

4.4.2 Provincial health and health services surveys conducted in 2009 and 2013.

Inputs ADB: $72 million • Civil works: $21.37 million • Equipment and vehicles:

$17.68 million • Drugs and supplies: $3.28 million • Staff development:

$8.43 million • Workshops, studies,

system development: $2.31 million • Consulting services:

$3.55 million • Project management:

$2.04 million • Taxes and duties on

investment: $1.46 million • Operations and

maintenance: $2.40 million • Taxes and duties on

recurrent costs: $0.11 million

• Contingencies: $7.44 million • Interest charges on loan

during implementation: $1.93 million

Government: $8 million • Resettlement: $0.86 million • Civil works: $5.27 million • Taxes and duties on

investment: $0.28 million • Operations and

maintenance: $0.56 million • Taxes and duties on

recurrent costs: $0.03 million • Contingencies: $1.00 million

ADB = Asian Development Bank, CHS = commune health station, DPMC = district preventive medicine center, HRD = human resource development, MOH = Ministry of Health, PHC = primary health care, SMS = secondary medical school, VHW = village health worker.

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I. PROJECT DESCRIPTION

A. Project Area and Location 1. The Project will support eight provinces in the south central coast region (SCCR) to improve the provincial health systems. The Project will finance a slice of each provincial health plan, focusing on district hospitals and human resource development, while the central Government is committed to provide complementary funds for primary health care. Guided by the Ministry of Health (MOH), each province was assisted to conduct provincial health accounts and prepare a 5-year plan and medium-term expenditure framework. These will serve as the basis for a comprehensive and results-based development approach and for prioritizing and coordinating investments among development partners. 2. Through a participatory planning process, four outputs were identified: (i) improved health facilities, including standard equipment and waste management, with a focus on district hospitals; (ii) strengthened provincial human resources through improved human resource development planning and training capacity, in addition to skills training at all levels; (iii) improved access to health care, in particular for poor, remote ethnic minority communes; and (iv) strengthened management of provincial health systems, including hospitals. B. Impact and Outcome 3. The Project will improve the health status of the population in the SCCR, in particular, the poor, women and children, and ethnic groups. The outcome will be more comprehensive, well-managed, and better-used provincial health systems with a focus on health care for the poor, women and children, and ethnic minorities, including reproductive health care, in Da Nang City and Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan, and Binh Thuan provinces. C. Project Components 4. The scope of the Project is divided into the following four components.

1. Improved Health Facilities

Based on priorities identified in the 5-year plan, the Project will upgrade health facilities in the eight target provinces to increase access and improve the quality of services. The Project will finance (i) civil works, equipment, and related supplies; and (ii) water, sanitation, and waste management systems. The Project will provide the inputs required to bring each facility up to specified standards. MOH will provide complementary funds to improve PHC.

a. New and Upgraded Health Facilities and Equipment 5. The Project will upgrade or newly construct a total of 26 facilities, including 12 district hospitals, 5 regional (interdistrict) hospitals, 1 provincial hospital, 1 rehabilitation hospital, 1 traditional medicine hospital, 1 SMS, and 5 DPMCs in the region. The 20 hospitals represent 19% of the total hospitals in the region, and were selected based on provincial priorities and consistency with national plans and project goals. Each construction site was surveyed for resettlement or environmental issues. The Project will also upgrade the national hospital design and construction standards and guidelines (para. 78). Once completed, newly constructed and renovated facilities must be properly maintained to realize benefits and justify investments. The

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Project will support preparing guidelines for preventive maintenance, collecting and translating technical manuals, and training hospital personnel in preventive maintenance procedures and arrangements.

6. The Project will also finance procuring equipment for upgraded or newly constructed hospitals and other institutions identified by provincial authorities as serving target populations. A total of 31 facilities, including 17 district hospitals, 5 regional hospitals, 3 provincial hospitals, 1 SMS, and 5 DPMCs in the region will receive equipment. The 25 hospitals represent 24% of the hospitals in the region. Equipment purchases will be in accordance with established MOH standards and will replace old and nonfunctioning equipment, upgrade technology for existing procedures, or provide new services. The Project will support purchasing an initial inventory of reagents and other supplies needed to properly utilize the new equipment, as well as training in use of the equipment and maintenance arrangements. b. Improved Water, Sanitation, and Waste Management Systems 7. Investments will be made as needed to ensure that all facilities built or upgraded under the Project have adequate and safe water, sanitation, and medical waste management systems, including wastewater systems, proper containers to segregate contaminated and hazardous waste, proper collection and storage facilities, and access to modern medical waste incineration and/or disposal facilities. A total of 840 hospital personnel (8 per hospital) will be trained in the theory, methodologies, and supervision of modern waste management practices. In addition, the Project will support consulting assistance to work with authorities in each target province in developing a province-wide plan for the management of medical waste. 2. Output 2: Strengthened Provincial Human Resources 8. Increasing the performance of health staff is a local concern and a demanding obligation for provincial health authorities. The Project will support (i) provincial human resources planning and management, (ii) building provincial training capacity, (iii) training for better quality of care, and (iv) HRD policy support. a. Improved Provincial Human Resource Planning and Management 9. The Project will provide assistance to each PHB to annually update and maintain the provincial HRD plan. The plan will provide for monitoring and evaluating staff quantity and quality, as well as education and training programs. The annual HRD plan will take into account national policy initiatives, including those currently being considered on licensure, certification, and continuing education. The plan will include targeted strategies to increase the leadership role of women in managing health services. To help boost the number of female and ethnic minority health workers in targeted communities, the Project will assist each province to develop provincial health sector gender and ethnic minority development plans, including focused interventions designed to ensure they reach targets for women and ethnic minorities in training courses at all levels. Health workers serving ethnic minority communities will be given priority for training, and training programs will include topics that particularly concern ethnic minorities. b. Improved Provincial Training Capacity 10. The Project will improve the quality of preservice education and in-service training by increasing the capacity of training facilities’ staff.1 Leadership will be enhanced by providing 16 1 For purposes of this report, the eight training facilities in SCCR (Da Nang Technical Medical College, six provincial

SMSs, and the Ninh Thuan medical center that is to become the region’s 7th SMS) are jointly referred to as “the SMSs.”

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scholarships to ensure each SMS has at least two senior staff members with masters degrees in nursing. The quality of teaching and learning at the SMSs will be improved by linking them with centers of excellence at medical universities in Viet Nam, supporting 48 short-course training attachments, and training 25 university staff as advisors for the 8 SMSs. As a mechanism for quality improvement in education programs, support will also be provided to enable SMSs to evaluate graduate preparedness. 11. The SMSs will also be supported in introducing and/or expanding skills-based training—an approach that has proven to be very successful in improving health staff performance. Equipment and materials will be provided to enable students to develop skills in demonstration rooms and laboratories. To assist provincial health authorities to implement skills-based training programs, the Project will support provincial training working groups and encourage the formation of similar groups where they do not exist. Eighty-eight working group members will be trained as master trainers by skills-based training specialists. Support will also be provided for SMSs and provincial training working groups to evaluate the impact of in-service training. c. Improved Quality and Availability of Staff 12. The Project will support well-supervised in-service training to improve the quality of care provided by health staff at all levels. By mobilizing master trainers and other trainers, 100–200 doctors, nurses, midwives, and technicians will be trained annually in each province, about 10% of staff. Training programs will be short term and will emphasize skills-based training in priority topics. All 400 workplace supervisors will be trained to ensure they have the skills necessary to support trainees back in the workplace. MOH is exploring options to encourage continuing education as a part of registering and licensing health professionals. The Project will support the SMSs to offer subsidized professional education meetings that will be open to health workers from both the public and private sectors. 13. To assist provinces in achieving MOH staffing standards for health facilities, the Project will support 64 scholarships for upgrade to bachelor and another 64 scholarships for postgraduate training in such core specialties as surgery and pediatrics. To address the shortage of health staff in 423 remote CHSs, in particular those serving poor ethnic minorities, the Project will provide 160 scholarships in particular to female school leavers to attend pre-graduate training at SMSs and on completion to be posted to CHSs near their communes. Half of these students will also be provided with bridging education to qualify for enrollment at the SMS. d. HRD Policy Studies Conducted 14. MOH is responsible for policy analysis and formulation, guidance to institutions, and programs and services to implement policy. To fulfill this role in the decentralized health system, MOH needs to maintain close links with provincial, district, and commune levels. The Project will support, in coordination with the departments of science and training, therapy, and organization and personnel, up to 10 field-based HRD studies related to improving health care for the poor, women and children, and ethnic minorities. 3. Output 3: Improved Access to Health Care for the Poor 15. Access to quality health care for the poor requires collaboration between services and communities so that health is seen as an issue of communal concern and not simply a technical matter for health workers. In the health services, this requires building skills in community-based health care. At the community level, VHWs and committees need backing from local officials and mass organizations. This output will aim to improve basic health care for 423 remote

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communes, including 223 communes classified as poor and others with ethnic groups having poor health indicators. It includes three interrelated sub-outputs targeting these communes: (i) training VHWs for remote communes, (ii) promoting health and nutrition especially targeting ethnic minorities, and (iii) reducing financial barriers to improve access for the poor. a. Better-Skilled Village Health Workers in Remote Communes 16. The Project will support the Government’s policy of strengthening the grassroots network of VHWs in 423 remote and disadvantaged communes in 84 districts in eight provinces. The Project aims to train CHS staff near targeted villages as trainers. Most of the 6,500 VHWs in the targeted communes will be provided with a total of 20 refresher training days over the project period. About 1,600 additional VHWs will be recruited and trained for an initial period of 1 month so that each village has at least one female and one male VHW providing basic health care by project completion. Each provincial training working group and district health bureau will conduct training of CHS staff and VHWs based on needs assessment, using peers and skills-based training methods. Provincial trainers will participate in training of VHWs to ensure adequate standard of training, and training will be adapted to the needs, ethnic diversity, literacy levels, and situations in each targeted district. b. Health and Nutrition Promoted in Ethnic Minority Communes 17. Targeting about 100 poor and ethnic minority communities, the Project will promote health and nutrition for women and children through behavior change communication. This will involve the orientation of 830 local leaders and skills training of 100 CHS staff and 200 VHWs or other community members. The focus of the program will be on community priorities, such as reproductive health and nutrition care, and accessing health services and the HCFP (para. 51). The Project will use a participatory approach to develop innovative, creative, and culturally appropriate health and nutrition promotion activities. A nongovernment organization will be contracted to provide technical support. c. Reduced Barriers to Health Care Funds for the Poor 18. Project support for Decision 139 is intended to reduce the financial barriers to health care services for poor and ethnic minority households in the SCCR provinces by (i) increasing awareness of Decision 139 among the intended beneficiaries and other local stakeholders, (ii) strengthening capacity in the SCCR provinces to manage the provincial HCFP, and (iii) providing data and analysis to inform future policy making by the MOH related to Decision 139. The Project will support preparation and dissemination of locally appropriate materials and programs to inform poor and ethnic minority communities, local governments, mass organizations, and health workers about the entitlements and requirements of Decision 139. It will help improve procedures for issuing and replacing health insurance cards for beneficiaries,2 streamline procedures and forms related to HCFP claims and disbursements, and train local health administrators and Viet Nam social security staff related to these procedures. It will support improved coordination and problem solving related to Decision 139 at provincial, district, and commune levels, as well as in monitoring the implementation and impact of Decision 139 through regular data collection by the PHB, participatory assessments, and special studies (Supplementary Appendix A).

2 The validity of the health insurance cards issued to Decision 139 beneficiaries in the project provinces will also be

extended from 1 year to at least 2 years.

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4. Output 4: Strengthened Provincial Health Systems 19. During project preparation, the provinces were assisted in preparing comprehensive provincial health plans. The Project will help strengthen the capacity of provincial health departments and hospitals to better manage their increasingly complex responsibilities to plan, manage, monitor, and finance the provincial health system. Managers need to become more results-oriented by establishing minimum service standards, setting performance targets, and monitoring progress toward reaching their objectives. The Project will support (i) strengthening the management of provincial health systems; (ii) strengthening the management of provincial and district hospitals; (iii) providing equipment, software, and staff training needed to introduce the HMIS; and (iv) operating the national project management unit (PMU) and provincial PMUs (PPMUs). a. Strengthened Provincial Health Systems Management 20. The Project will assist provincial health authorities in evaluating their priorities to help close the gap between program obligations and financial resources using a team approach. A series of workshops will be planned for 48 provincial and district managers, focusing on planning, information-based problem solving, leadership, team building, supervision, communication, financial management, and project monitoring. Efforts will be made to improve management tools for managing subsystems. Over the life of the Project, the annual plan will become a key tool for managing and monitoring the performance of the provincial health system, and provincial health officers will become increasingly results-oriented and skilled in managing their complex responsibilities. The Project will also provide 16 scholarships to individuals from the eight provinces selected on the basis of merit to attend a postgraduate program in health system management.

b. Strengthened Hospital Management 21. The Project will support short, skills-based training programs designed to upgrade the skills of 106 senior hospital managers (one per hospital) and 200 hospital department managers (two per hospital) in planning, information-based problem solving, leadership, team building, supervision, communication, financial management, and project monitoring. The Project will support on-site sessions on organizational development designed to help identify minimum standards of service, develop performance targets, prepare work plans, and design a system to monitor and report progress. c. Better Health Management Information Systems 22. The Project will strengthen HMISs in provincial and selected district offices and 40 hospitals in the target provinces using existing data collection systems to provide more accurate and timely information on health services usage, personnel records, and financial accounts. Under a United Nations Population Fund project, software and detailed plans for improved HMISs have been successfully developed and implemented in several districts of Binh Dinh. Based on that model, similar systems will be adapted for implementation in selected institutions in the eight provinces. HMISs will be computerized at provincial level and in at least 50% of district health facilities linked through the internet. The Project will support the costs of computers, associated software, other HMIS office equipment, plus planning and training.

d. Effective Project Management Support

23. The Project will finance the purchase of vehicles, computers, software, office equipment and supplies needed to establish and operate PPMUs in each of the eight target provinces plus

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a national PMU. The PPMUs will be the principal units for implementation in each province and will be provided training in project implementation. The national PMU will provide technical, coordination, and logistics support to the PPMUs and other departments in charge of implementation, including computerized financial management. The Project will also support baseline and end-of-project household and health services surveys to evaluate the progress of the sector and project impact in the targeted provinces. D. Special Features 24. The project design is based on 5-year plans for comprehensive provincial health systems development as a building block toward the national sector approach. Each province has prepared a provincial health account, 5-year provincial plan, and expenditure framework. While this planning process needs to be strengthened further, it provides a good basis for harmonizing aid at provincial level. 25. Health management is increasingly complex, and managers, most of them medical doctors, are not prepared for the task. The Project will strengthen health management in critical areas of provincial health system planning and budgeting, hospital management, HRD planning, managing the HCFP, financial management, managing civil works, and waste management. 26. Developing the provincial planning and management capacities will require a strong link between MOH and the provinces for policy guidance, field studies, and provincial feedback to contribute to policy formulation. A budget for supporting MOH in these areas has been included.

II. COST ESTIMATES AND FINANCING PLAN

27. The total project cost is currently estimated at $80.0 million, including taxes and duties of $1.87 million (Table 1). Detailed cost estimates are in Appendix 4.

Table 1: Project Investment Plan ($ million)

Item Amount A. Base Costsa 1. Improved Health Facilities 52.9 a. Hospital upgrading and expansion 48.6 b. Hospital water and waste management 4.3 2. Human Resource Development 6.2 a. Provincial human resource planning 0.6 b. Strengthening local training capacity 1.3 c. Improving quality of clinical health care, including scholarships 4.1 d. Studies 0.2 3. Access to Quality Health Care 6.2 a. Health services in remote communities 4.9 b. Improving health behavior 0.9 c. Reducing financial barriers to access 0.4 4. Provincial Health Systems Management 4.3 a. Strengthening provincial health system management 0.9 b. Strengthening management of provincial and district hospitals 0.7 c. Health management information systems 0.6 d. Project management 2.1 Subtotal (A) 69.6

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Table 1: Project Investment Plan ($ million)

Item Amount B. Contingencies 1. Physical Contingenciesb 2.5 2. Price Contingenciesc 6.0 Subtotal (B) 8.5 C. Financing Chargesd 1.9 Total Cost (A+B+C)e 80.0 a In February 2008 prices. b Computed at 5% for civil works, equipment, and drugs and supplies. c Computed at 1%–4% on foreign exchange costs and 5%–6.5% on local currency costs. d Includes interest during implementation computed at 1% per annum for Asian Development Fund loan. e Includes taxes and duties of $1.87 million. Source: Asian Development Bank estimates.

28. The Government has asked ADB for a loan in SDR equivalent to $72 million from its Special Funds resources, including taxes and duties of $1.57 million, to help finance the Project (Table 2). The loan will have a 32-year term, including a grace period of 8 years, and an interest rate of 1% during the grace period and 1.5% per annum thereafter. The Government will contribute $8 million through central and provincial counterpart contributions (Appendix 4).

Table 2: Financing Plan ($ million)

Percentage Source Amount of Total Asian Development Bank 72.0 90 Government 8.0 10 Total 80.0 100

Source: Asian Development Bank estimates.

III. IMPLEMENTATION ARRANGEMENTS

A. Executing and Implementing Agencies

29. MOH will be the Executing Agency (EA) for the Project. The provincial people’s committee (PPC) in each of the eight provinces will be the implementing agencies and will be represented by the PHB. MOH will establish a project steering committee to review project progress and provide directions on a quarterly basis, as well as to approve the annual report, plan, and budget. It will be headed by the vice-minister of health and include senior officials, as required, from MOH departments, provinces, and other ministries. Similar oversight will be provided by the PPC at provincial level. 30. The Project will be implemented through a national PMU in MOH and eight PPMUs in the respective PHBs. The PMU will work under the project steering committee’s guidance and be responsible for overall project management. It will have six responsibility areas: (i) project planning, monitoring and evaluation, studies, and social safeguards; (ii) civil works and environmental safeguards; (iii) HRD; (iv) procurement and logistics; (v) personnel and administration; and (vi) accounting and disbursement. PMU staff includes a project director, up to three deputy directors, a monitoring and evaluation expert, a study coordinator, an engineer, a medical equipment expert, a training expert, an administrator, and an accountant. MOH

8

departments will be made responsible to support the technical aspects of the Project. The Department of Medical Equipment and Construction will support output 1, the Department of Science and Training will support output 2, the Department of Preventive Medicine and Environment will support output 3, and the Department of Planning and Finance will support output 4. Additional experts may be contracted for defined periods to do project work. If MOH staff is not available, national experts will be contracted. 31. In each project province, the PPMU will be responsible for project implementation. Each PPMU will have similar responsibility areas as the PMU. The PPMU will work under the guidance of the PPC, with technical support of the PMU, and will be headed by the director or deputy director of the PHB. Each PPMU will have a full-time deputy director for planning, administration, coordination, and monitoring; an engineer; a community development expert; a procurement officer; and an accountant. Local leaders, staff, and beneficiaries will be involved in decision making through various consultative mechanisms.

IV. IMPLEMENTATION SCHEDULE

32. The Project will be implemented over an estimated 5-year period, beginning 1 January 2009 and ending 31 December 2013. The project implementation schedule is in Appendix 6.

V. CONSULTANT RECRUITMENT

33. The Project will require 9 international consultants for a total of 70 person-months, 12 national consultants for a total of 302 person-months, a nongovernment organization for 48 months, and short-term national consultants for a total of 12 person-months. MOH will recruit as individual consultants one international engineering and environmental specialist; national experts in project management, resettlement, environmental and waste management, and HMIS; and the short-term consultants. All other consultants will be hired through three firms in accordance with ADB’s Guidelines on the Use of Consultants (2007, as amended from time to time), using a simplified technical proposal and quality and cost-based selection. Capacity building of counterparts is included in the assignment of consultants.

VI. TRAINING

34. The Project supports a substantial HRD program. The indicative list of training activities is in Appendix 9.

VII. PROCUREMENT

35. Each participating province will prepare an annual procurement plan and submit it for the MOH’s approval before the start of the fiscal year. All ADB-financed procurement will be in accordance with ADB’s Procurement Guidelines (2007, as amended from time to time). Procurement of goods will use international competitive bidding procedures if over $1 million, national competitive bidding if $1 million or less, or shopping if less than $100,000. Civil works will use international competitive bidding procedures if over $4 million, national competitive bidding if $4 million or less, or shopping if less than $100,000. Vehicles will be procured through the United Nations, using procurement procedures acceptable to ADB. The procurement plan with indicative contract packages is in Appendix 7.

VIII. DISBURSEMENT PROCEDURES

36. The project loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2007, as amended from time to time). MOH will open a national

9

project imprest account, and each of the eight PHBs a second-generation imprest account (SGIA), to manage project funds at any bank that is acceptable to ADB. The initial amount to be deposited by ADB in the national project imprest account will be based on the estimated project expenditure to be paid out of the imprest account for the first 6 months of project implementation or $4,000,000, whichever is lower. Similarly, the SGIA advances will be based on the estimated provincial expenditures to be paid out of the imprest accounts for the first 6 months of project implementation or $250,000, whichever is lower. The statement-of-expenditure (SOE) procedure may be used to reimburse eligible project expenditures and to liquidate or replenish imprest account advances. The SOE procedure is applicable to individual payments not exceeding $100,000 equivalent per payment and to liquidate advances made into the imprest account as per covenants. For SGIAs, this maximum is $50,000 equivalent. MOH will ensure timely release of funds to the provincial accounts. Detailed arrangements to establish the imprest account and SOE procedure will be made in accordance with ADB’s Loan Disbursement Handbook. Sufficient supporting documentation must be kept at each level to substantiate all expenditures paid from the loan proceeds. The release of funds will be subject to the project accomplishment reports at the provincial and national levels.

IX. PROJECT PERFORMANCE MONITORING AND EVALUATION

37. In support of developing a comprehensive provincial program approach, the project performance monitoring system will be integrated with and strengthen the Government’s provincial HMIS (output 4). MOH will contract out health and health services surveys in the first and fifth project year to assess the performance of the provincial health system. Measurement of outputs, activities, and inputs will be disaggregated by source of funding. Particular attention will be given to monitoring impacts on the poor, women, children, ethnic groups, and other vulnerable groups. Qualitative studies will be undertaken for particular aspects (Appendix 13).

X. PROJECT REVIEW

38. The Government and ADB will jointly review project implementation twice a year, including related national policy activities and provincial planning, budgeting, and reforms. They will undertake a joint midterm review after 2 years of project implementation. Within 3 months of physical completion of the Project, the Government will prepare and submit to ADB a project completion report on the project execution, including compliance with loan covenants

XI. REPORTING REQUIREMENTS

39. MOH, as the EA, will provide ADB with an inception report and updated project administration memorandum within 3 months of loan effectiveness. Thereafter, MOH and the provinces will provide ADB with quarterly and annual progress reports and plans for project implementation within 30 days of each calendar quarter period. The progress reports and plans will be in English and summarize (i) PMU capacity, coordination, and issues; (ii) progress made against established targets, including quality; (iii) problems encountered in project activities and actions taken to resolve issues; (iv) compliance with loan covenants, including provision of counterpart funds; (v) updated implementation schedule of activities for the next 3 months; and (vi) financial statements including operations and maintenance support.

XII. ACCOUNTING AND AUDITING

40. MOH and the departments of health in the eight provinces will maintain separate project records and accounts that are adequate to identify goods and services financed from the ADB loan proceeds. The EA has implemented similar projects financed by ADB and others during the last 10 years, and its financial management capacity is considered adequate.

10

41. The Government of Viet Nam will annually audit all accounts and financial statements, SOEs and revenues, and imprest accounts related to the Project in accordance with auditing standards acceptable to ADB and using international accounting and auditing standards as a benchmark. Audited financial statements and project accounts, together with the report of the auditor, including the auditor’s opinion on the use of loan proceeds, compliance with covenants, and the use of the imprest account and SOE procedures, will be submitted within 6 months of the close of the financial year.

XIII. MAJOR LOAN COVENANTS

42. The status of compliance, including actions taken to comply with the covenants (see Appendix 17), should be indicated in the appropriate column and be appended in the quarterly progress report.

XIV. KEY PERSONS INVOLVED IN THE PROJECT

A. ADB Staff

Social Sectors Division (SESS) Ms. Shireen Lateef Southeast Asia Regional Department (SERD)

Director, SESS Tel. No.: (63-2) 632 5620; 6981

Divisional Fax No.:(632) 636-2228 E-mail: slateef@adb.org Mr. Sjoerd Postma Senior Health Specialist Tel. No.: (63-2) 632-5934 E-mail: spostma@adb.org

Ms. Ludovina R. Balicanot Assistant Project Analyst Tel. No.: (63-2) 632-6531 E-mail: lbalicanot@adb.org Ms. Madeline Dizon Administrative Assistant Tel. (63-2) 632-5934 Email: mdizon@adb.org

Controller’s Department Mr. Yasumitsu Hirao Loan Administration Division Financial Control Specialist (CTLA-5) Tel. No.: (63-2) 622-4915 E-mail: yhirao@adb.org Central Operations Services Office Consulting Operations Services Division 2 (COS2)

Ms. Galia Ismakova Procurement Specialist Tel. No.: (63-2) 632-6465 E-mail: gismakova@adb.org

Address: Asian Development Bank P.O. Box 789 0980 Manila, Philippines

11

Facsimile:

(632) 636-2228 (SESS)

Website Address: http://www.adb.org

B. Executing Agency 43. The key contact points are: Project Executing Agency:

Ministry of Health Tel. No.: ++84 4 38465730 Fax No.: ++84 4 37365910 Health Care in the South Central Coast Region Project (PMU)

Mr. Nguyen Doan Tu Project Director

Tel. No.: ++84 4 38465730 E-mail: Tudoanguyen@gmail.com Ms. Pham Thi Hong Hanh

Vice Director of PMU Tel. No.: ++84 4 38465730

E-mail: phamhonghanh.moh@gmail.com Ms. Nguyen Thi Mai An

Vice Director of PMU Tel. No.: ++84 4 38465730

E-mail: maian_moh@yahoo.com Ms. Nguyen Thanh Dung

Chief accountant of PMU Tel. No.: ++84 4 38465730

E-mail: duongn_t@yahoo.com Ms. Pham Thi Tuyet Nhung

Head – Administrative Group Tel. No.: ++84 4 38465730

E-mail: nhungmoh@yahoo.com

XIV. ADB ANTI-CORRUPTION POLICY

44. The Government has been advised of ADB’s anticorruption policy, particularly the provisions in the recently revised Guidelines for Procurement under Asian Development Loans and Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers, requiring governments as well as bidders, suppliers, contractors, and/or consultants to observe the highest standards of ethics during procurement and execution of the contracts financed under the Project.

12

45. The ADB Office of the General Auditor is the point of contact to report allegations of fraud and corruption among ADB-financed projects or its staff. Within that office, the Anticorruption Unit is responsible for dealing with all matters related to allegations of fraud and corruption. Please refer to the ADB’s Anticorruption Policy Handbook. Anyone coming across evidence of corruption associated with the Project may contact the Anticorruption Unit by telephone, facsimile, by mail, or by email as follows: Integrity Division (OAGI) Office of the Auditor General Asian Development Bank 6 ADB Avenue, Mandaluyong City 0401 Metro Manila, Philippines Postal Address: P. O. Box 789 0980 Manila, Philippines Telephone No.: (63-2) 632 5004 Facsimile No. : (63-2) 636 2152 E-mail : anticorruption@adb.org or integrity@adb.org 46. The PAM shall be read in conjunction with the RRP, Loan Agreement, and relevant ADB documents listed in Appendix 18.

Appendix 1

13

SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY

Country/Project Title: Viet Nam: Health Care in the South Central Coast Region Lending/Financing Modality: Project Department/

Division: Southeast Asia Department Social Sectors Division

I. POVERTY ANALYSIS AND STRATEGY

A. Linkages to the National Poverty Reduction Strategy and Country Partnership Strategy With a focus on health care for the poor, the Project supports Viet Nam’s 5-year Socioeconomic Development Plan 2006–2010 and the Comprehensive Poverty Reduction and Growth Strategy. The strategies aim for sustained annual growth of 7.5%, eliminating hunger by 2010, and halving poverty from 2002 to 2010. Special emphasis is placed on reaching poor communities and ethnic minorities in remote areas. In health care, Viet Nam has targeted further reductions in maternal mortality, infant mortality, and malnutrition; reversing the prevalence of malaria and tuberculosis; and halting the growth of HIV/AIDS. The Government has identified several key problems needing to be addressed, including deteriorating and poorly equipped infrastructure, shortages of skilled health workers, limited access for the poor, and an increasingly complex health system. Asian Development Bank’s (ADB’s) country strategy and program for Vietnam (2007–2010) is directly linked to supporting the Socioeconomic Development Plan’s targeted outcomes. Support will be directed to improving environmental management, human resources development, and gender equity while supporting ethnic minorities development. In line with Viet Nam’s and ADB’s strategies, the Project will strengthen provincial health systems and help improve the health status of the poor, women, and children in the south central coast region (SCCR). The Project will contribute toward achieving the Millennium Development Goals (MDGs) and Viet Nam Development Goals. B. Poverty Analysis Targeting Classification: GI 1. Key Issues Viet Nam’s recent socioeconomic development progress has been remarkable. Poverty was cut from 58.1% in 1993 to an estimated 19.5% in 2005. During this period, income per capita grew from $288 to $622. Broad-based economic growth, greater macroeconomic and political stability, and targeted programs to poor and vulnerable groups have all helped to reduce poverty. The country has achieved a high level of human development, and health outcomes have improved significantly. Life expectancy has increased by more than 6 years for both men and women since 1990, and maternal mortality rates have declined to 130 per 100,000 live births. Immunization rates have risen, and infant and child mortalities have fallen. Health services coverage also improved—in 2005, 97.8% of children under 1 year of age had been fully immunized and 96.1% of deliveries were attended by a trained health worker. Viet Nam has made good progress in achieving MDGs and Viet Nam Development Goals and has already achieved its poverty targets. Good progress has been made toward universal primary education, gender equality, maternal health, and access to safe drinking water. Despite these achievements, increased efforts are required to ensure key MDGs related to child mortality, drinking water, and HIV/AIDS are met. This means improving the quality of key services, targeting pockets of poverty, and ensuring sound and environmentally sustainable practices. Significant pockets of poverty remain. In 2004, the incidence of poverty was 26.4% in rural areas but 13.7% in urban areas. While food poverty (at 3.3%) has been largely eliminated in urban households, 8.1% of rural households remain food-poor. Ethnic minorities, in particular, have not kept apace of the economic progress experienced by others. Similarly, the health status of those who live in rural areas, especially ethnic minorities, has not progressed as rapidly as for urban dwellers. The remoteness of many rural communities and the unavailability of skilled health workers contribute significantly to their poverty and poor health status. The cost of health care is the most significant constraining factor, and user fees, coupled with the cost of drugs and expenses for travel, can be a devastating financial burden for those surviving at a subsistence level. While the introduction of health insurance is beginning to mitigate these financial burdens, the access to quality care remains limited for these groups. Viet Nam’s health system is burdened by an infrastructure that is old, deteriorated, and poorly equipped, with inadequate systems for water and waste management and infection control. The facilities and equipment at most district hospitals are old and degraded. Provincial hospitals are overwhelmed, with overcrowded wards and large volumes of outpatients. Many commune health stations in the mountainous areas cannot provide basic health care services and lack essential equipment and drugs. 2. Design Features While the health care funds for the poor have reduced some of the financial barriers to health care and led to increases in poor people’s utilization of health services, these have not helped to improve the quality of health facilities and health staff or the supply of equipment and drugs. The Project will address these gaps and improve access to quality health services for about 9 million people (4.6 million women, 4.4 million men, and nearly 500,000 ethnic minority people) living in the eight target provinces, thereby directly or indirectly improving their health status. Key project outputs

Appendix 1

14

include (i) improved health facilities, providing improved quantity and quality of health care; (ii) strengthened provincial human resources, increasing the number of skilled health staff providing quality health care services; (iii) improved access to health care for the poor; and (iv) strengthened provincial health systems in terms of equity, efficiency, and effectiveness. Improved health reduces income losses and expenditures due to illness or disease, and it indirectly protects the labor force and production of food and cash crops. Four of the eight project provinces have poverty levels significantly above the national average of 19.5%, including Ninh Thuan at 45.0%, Quang Nam at 36.3%, Quang Ngai at 36.1%, Binh Dinh at 28.3%, and Phu Yen at 21%. The Project will also be targeting such vulnerable and poor groups as women and ethnic minorities for specific interventions and training programs.

II. SOCIAL ANALYSIS AND STRATEGY A. Findings of Social Analysis Although economic growth has benefited most of society, the level of inequality, including for health status, has increased. The poverty incidence in rural areas remains significantly higher than in urban areas, and 61% of ethnic minority households lived below the poverty line in 2002 compared with 14% of Kinh and Chinese households. Similarly, the health status of the rural population and ethnic minorities is significantly worse than in urban areas. Based on a 1999 study, the infant mortality rate was 69 per 1,000 live births for ethnic Gia Rai, 56 for ethnic H’mong, and 21 for the majority Kinh population. In 2004, 4% of Kinh and Chinese children under 5 were severely malnourished compared to 33% of ethnic minority children. A Ministry of Health study conducted in 2000–2001 found maternal mortality ratios of 79 per 100,000 live births in urban areas, 145 in rural areas, 269 in the mountainous and midland areas, and 81 for Kinh compared to 316 among ethnic minorities. The proportion of ethnic minority people belonging to commune health centers with a medical doctor is only 30%, compared to 63% for Kinh or Chinese people. There is also a shortage of qualified health care professionals from ethnic minorities who can bridge the language and culture gap in providing health services in certain areas. The public health system thus faces considerable challenges in protecting the health of poor and vulnerable groups and in responding to the changing patterns of disease associated with ongoing social, demographic, and epidemiological transitions. There is significant potential for improving health outcomes among the poor and ethnic groups in the project area. The Project will upgrade health facilities and equipment and increase the capacity of health workers to provide quality care. To help increase the number of women and ethnic minority health workers, the Project will assist each province to develop gender and ethnic minority action plans with focused interventions to ensure they reach targets for women and ethnic minorities in training courses. Health workers serving ethnic minority communities will be given priority for training, and programs will include topics that disproportionately affect ethnic minorities. The Project will also specifically address quality of care issues in remote and poor commune health stations, where lack of staff is a problem, and will provide scholarships for local school leavers to attend health worker training at provincial secondary medical schools or colleges in the SCCR. The poorest communes, many of them with significant ethnic minority populations having limited access to services and poor health indicators, will be targeted to receive training for village health workers, health and nutrition promotion, and assistance to reduce financial barriers to health care.

B. Consultation and Participation

1. Consultation and Participation Process during the Project Preparation The Project was designed following a highly participatory approach, including planning workshops with the eight provincial health teams and three regional workshops. Stakeholder consultations were carried out with national agencies, development partners, provincial and district health officials, managers and staff of hospitals and health centers, village health workers, and potential beneficiaries that include poor people, women, and ethnic minorities. The active involvement of all stakeholders will continue during project implementation. 2. What level of consultation and participation (C&P) is envisaged during the project implementation and monitoring?

Information sharing Consultation Collaborative decision making Empowerment 3. Was a C&P plan prepared? Yes No A participation strategy is incorporated into the overall project design and detailed in the ethnic minority strategy and gender action plan. The Project will place strong emphasis on gender-inclusive community participation and consultation. Active participation of key stakeholders—especially among the poor and ethnic minority groups—will be crucial to help identify special needs and ensure accessibility to health care services. Women’s participation will be central to the development, implementation, and monitoring of project activities. Special provisions and budgets have

Appendix 1

15

been included to ensure active participation of women, ethnic minorities, and other vulnerable groups. This process will be regularly monitored and evaluated by consultants and project staff, with the results fed back into ongoing project implementation.

C. Gender and Development 1. Key Issues There are significant regional disparities in key health indicators, and women are particularly vulnerable in mountainous and remote communities. Gender development is intricately linked to issues of ethnicity and poverty, and ethnic minorities throughout Viet Nam, especially women and children, are particularly lagging behind. In ethnic minority communities in the central highlands, for instance, the burden of disease for females of reproductive age (15–44) is more than 25% higher than the national average. The 2001–2002 Viet Nam National Health Survey found that, among women of reproductive age (18–34 years), prenatal care and immunization in ethnic minority groups was just two-thirds that for the Kinh population. The maternal mortality ratio is 269 per 100,000 live births in mountainous and midland regions compared to 81 in the deltas, 81 in the Kinh ethnic majority compared to 316 among ethnic minorities, and 145 in rural areas compared to 79 in urban areas. 2. Key Actions

Gender plan Other actions/measures No action/measure

The Project is designed to particularly benefit women of reproductive age and children under 5 years of age. A project-specific gender action plan (GAP) has been formulated to promote the equal participation of all stakeholders as project beneficiaries. The GAP is in Appendix 11.

III. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS Issue Significant/

Limited/ No Impact

Strategy to Address Issue Plan or Other Measures Included in Design

Involuntary Resettlement

Significant A full resettlement plan has been prepared and a resettlement framework will guide resettlement plan preparation for subproject sites that will be identified during implementation.

Full Plan Short Plan Resettlement

Framework No Action

Indigenous Peoples

Significant

The project design specifically targets ethnic minorities for many of the activities and includes several strategies to ensure that ethnic minorities benefit from all project outputs.

Plan Other Action

(Ethnic minority strategy provided)

No Action

Labor

Employment Opportunities

Labor Retrenchment

Core Labor Standards

No impact

Any impacts will be positive, as significant investments will be made for human resource development of key health service staff and increasing employment opportunities. The Project will introduce no affordability issues. It will help improve access to financing of health services for the poor.

Plan Other Action No Action

Action No Action

Other Risks and/or Vulnerabilities HIV/AIDS Human trafficking Others

None

Plan Other Action No Action

IV. MONITORING AND EVALUATION

Are social indicators included in the design and monitoring framework to facilitate monitoring of social development activities and/or social impacts during project implementation? Yes No

Appendix 2

16

ETHNIC MINORITY ACTION FRAMEWORK 1. An ethnic minority strategy has been prepared for the Project. The purposes of the strategy are to (i) guide the assessment of potential impacts on ethnic minorities to be done for each of the provinces during implementation; (ii) assist the preparation of specific actions to address the impacts; (iii) present interventions to improve the quality of services in the basic health care system for ethnic minorities, including at the village level; (iv) present interventions with a gender focus to address the needs of ethnic minority women and children; (v) help ensure that ethnic minorities have increased opportunities to participate in training at all levels; and (vi) guide the development of information, education, and participation methodologies so that they are targeted to ethnic minority needs, culturally appropriate, and sustained. The ethnic minority strategy is based on (i) consultations with ethnic minorities, government officials, local organizations, and other key stakeholders; and (ii) secondary sources and past Asian Development Bank (ADB) projects. The strategy is in accordance with current Viet Nam regulations and complies with ADB’s Policy on Indigenous Peoples (1998).

A. Ethnic Minorities and Health in Viet Nam and the Project Area

2. Viet Nam had a total population of about 85.3 million people in 2007, of which about 14% were ethnic minorities. There are 53 ethnic minority groups and close to 100 subgroups, most of which live in the northern and central mountainous regions and in lowland river deltas. Based on the socioeconomic indicators from the 2004 Viet Nam Household Living Standard Survey and other studies, ethnic minorities are generally poorer than the Kinh and have limited access to education and health care services. About 39% of those recorded as living in poverty were from ethnic minorities, and 61% of all ethnic minority people are poor compared with only 14% of the majority Kinh and Chinese. Only 4% of ethnic minorities have access to sanitation and 19% to clean water, compared with the Kinh majority group at 36% and 63%, respectively. A recent ADB project in Viet Nam1 reported that, given the poverty gap for minorities, if current trends persist, poverty will predominantly be related to ethnicity by 2010.

3. Ethnic minorities tend to be poorer than the Kinh or the Chinese due to (i) geographical remoteness, (ii) lack of farming knowledge and skills, (iii) traditional cultivation practices (i.e., shifting cultivation), (iv) limited access to cash and credit, (v) environmental problems, and (vi) poor physical and social infrastructure. These conditions also limit the development of ethnic women, who have higher levels of illiteracy, have less access to training for improved agricultural techniques, participate less in nonagricultural work, and have less mobility and interaction with others. Based on the 2004 survey data, the smallest ethnic minority groups (e.g., less than 15,000 people) are also the poorest. 4. The health status of the rural population and ethnic minorities is significantly worse than in urban areas. Based on a 1999 study, the infant mortality rate was 69 per 1,000 live births for ethnic Gia Rai, 56 for ethnic H’mong, and 21 for the majority Kinh population. In 2004, 4% of Kinh and Chinese children under 5 were severely malnourished compared to 33% of ethnic minority children. A Ministry of Health study conducted in 2000–2001 found maternal mortality ratios of 79 per 100,000 live births in urban areas, 145 in rural areas, 269 in the mountainous and midland areas, and 81 for Kinh compared to 316 among ethnic minorities. While 98% of people live in communes that have access to a health center, only 59% of people live in communes where the health center has a medical doctor. The proportion of ethnic minority people living in communes where the commune health center has a medical doctor is only 30%, compared to 63% for Kinh or Chinese people. There is also a shortage of qualified ethnic health care professionals who can bridge the language and

1 ADB. 2007. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Socialist

Republic of Viet Nam for the Lower Secondary Education for the Most Disadvantaged Regions. Manila.

Appendix 2

17

culture gap in providing health services in certain geographic areas. The public health system thus faces considerable challenges in protecting the health of poor and vulnerable groups and in responding to the changing patterns of disease associated with ongoing social, demographic, and epidemiological transitions. 5. There are several ethnic minority groups in the south central coast region (SCCR), mainly the Cham population of the lowlands and a number of other minority populations living in the upland fringes bordering the central highlands. These groups are significantly worse off in terms of poverty and health status than the majority Kinh population. More than 90.0% of ethnic minorities in the SCCR lived in poverty in 2004, compared to only 15.0% of Kinh and Chinese. In 2004, 72% of minorities in the SCCR were considered to be “food-poor,” compared to a few percent among Kinh.2 The so-called “poverty gap”3 is also much higher among minorities (19.2%) than among the poor Kinh (2.6%), with the number for ethnic minorities in SCCR reaching as high as 39.5%.4

Table A12.1: Project Provinces and Ethnic Minorities

Project Area

Rate of Povertya

Total Population IMRb

Rural Pop’n.c Ethnic Minoritiesd

Viet Nam (Total)

6.9% 84,155,800 17.8 51

Da Nang 4.3% 777,100 9.0 13.8 99.87% Kinh, 0.13% Ka Tu

Quang Nam

36.3%

1,463,300 22.0 82.9 93.13% Kinh, 2.83% Co Tu, 1.73% Ca Dong, 1.01% Bhnoong, 0.5% Xo dang

Much of the west of the province dominated by the Co-tu population, significant Gie-trieng and Xo-dang populations in south west bordering Kon Tum, and a narrow strip of Co population along the southern border with Quang Ngai.

Quang Ngai

36.1%

1,269,100

20.8 85.6

88.21% Kinh, 1.15% Xo Dang, 8.7% Hre, 1.87% Cor

Much of the west of the province dominated by large Co and Hre populations, along with small numbers of Xo-Dang near the border of Kon Tum (where most Xo-Dang live).

Binh Dinh 28.3% 1,556,700 20.3 74.8 97.98% Kinh, 1.04% Ba Na, 0.52% Hre, 0.3% Cham, 0.06% Hoa.

Large Ba Na population throughout west of province bordering Gia Lai (where most Ba Na live). Mountain Cham (Cham Hroi) also in western regions.

Phu Yen 21.0% 861,100 30.8 79.1 94.48% Kinh, 2.08% E De, 0.43% Ban A, 2.06% Cham Ho Roi, 0.18% Tay

Significant Ba Na population in north west bordering Gia Lai, large E De population in south west bordering Dac Lac. Mountain Cham (Cham Hroi) also in these western regions.

Khanh Hoa

9.7% 1,122,500 14.7 60.1 95.5% Kinh, 3.17% Rac lay, 0.58% Hoa, 0.32% Co ho, 0.25% E de

Significant E De population in north west bordering Dac Lac and Lam Dong, and large Ra Glai population in north west bordering these two provinces. Small Co Ho population in west bordering Lam Dong. Mountain Cham (Cham Hroi) in western regions.

2 Swinkels, Rob and Turk, Carrie. 2006. Poverty and Poverty Reduction in Viet Nam 1993–2004. Hanoi. 3 The poverty gap index is a measure that captures the magnitude of poverty by considering both the number of poor people and

how poor they are. It is a combined measurement of incidence of poverty and depth of poverty. 4 World Bank. 2007. Proposed Credit to the Socialist Republic of Viet Nam for a Proposed First Program 135 Phase 2 Support

Operation. Washington, DC.

Appendix 2

18

Project Area

Rate of Povertya

Total Population IMRb

Rural Pop’n.c Ethnic Minoritiesd

Ninh Thuan

45.0% 562,300 22.6 67.4 78% Kinh, 12% Cham, 9% Raglai

Large Ra Glai populations in north and south west bordering Lam Dong. Significant Co Ho population also in west. Large lowland Cham population.

Binh Thuan

15.7% 1,150,600 18.7 62.4 93% Kinh, 2.8% Cham, 1.2% Raglai, 1.1% Hoa, 0.8% K’Ho

Large Ra Glai population in north and scattered elsewhere further south bordering Lam Dong. Significant Co Ho population in north west. Large lowland Cham population.

IMR = infant mortality rate, Pop’n = population. a Incidence of Poverty: National & Regional: Health Statistics Yearbook 2005. Provincial: Vietnam Household Living Standards

Survey 2002, as cited in Achieving The Millennium Development Goals, Viet Nam, August 2005. b Number of infant deaths below 1 year of age per 1,000 live births. c Percentage of population that live in rural areas. d Provincial Health Department data, 2007. Source: Ministry of Health, Viet Nam. B. Legal Framework and Principles

6. The ethnic minority strategy is based on Vietnamese laws and ADB’s Policy on Indigenous Peoples (1998). ADB’s policy aims to protect ethnic minorities from the adverse impacts of development and to ensure that they benefit from development projects and programs. ADB’s Operations Manual section on indigenous peoples outlines ADB procedures and operational guidelines.5

7. Viet Nam has a comprehensive legal framework for social equality. The Comprehensive Poverty Reduction and Growth Strategy for 2001–2010 sets 11 goals, of which 7 deal directly with issues of gender and ethnic minorities and 2 with issues of vulnerability, poverty eradication, and ethnic culture preservation: (i) achieve better education for all; (ii) reach gender equality and empower women; (iii) reduce infant and child mortality; (iv) improve maternal health; (v) combat HIV/AIDS, malaria, and other communicable diseases; (vi) reduce vulnerability; and (vii) eradicate poverty and preserve ethnic minority culture. Key stakeholders for the development of ethnic minorities include the Ministry of Health; Ministry of Labor, Invalids and Social Affairs; and the National Institute of Linguistics. The Committee for Ethnic Minority is responsible for coordinating ethnic issues and developing and implementing policies for ethnic minority groups in mountainous regions. 8. The Government has a stated commitment to improving health care for the ethnic minority population. Directive No. 6 of 22 January 2002 of the Central Executive Committee emphasizes the priority of health care in mountainous and remote areas, and particularly for ethnic minorities. The Ministry of Health has issued Decision 370/2002 promoting health care at the commune level for 2001–2010, and its Decision 139 entitles ethnic minorities to free health care that is financed through the national budget. C. Anticipated Impacts and Proposed Actions for Ethnic Minorities Development

9. The ethnic minority strategy ensures that all ethnic minority groups share proportionately in project benefits and protects them from any adverse effects from the Project. During project implementation, the provinces will review the socioeconomic and demographic profiles of the target communities with respect to ethnicity. Using ADB’s checklist on indigenous peoples, the potential effects of the Project will be assessed for all ethnic minorities, potential impacts will be identified, and measures to mitigate these impacts will be incorporated into the detailed design of each

5 ADB. 2006. Operations Manual. Section F3: Indigenous Peoples. Manila (25 September).

Appendix 2

19

subproject. Budget will be made available to support the implementation of specific actions. Ethnic minorities that are affected by land acquisition and resettlement are eligible for the same entitlements and levels of compensation, regardless of ethnicity or gender. D. Institutional Arrangements 10. Implementation arrangements and estimated costs of the ethnic minority strategy are integrated into the Project’s overall arrangements and total budget. Representatives from the Committee of Ethnic Minority and the Viet Nam Women’s Union will play a critical role in facilitating participation by all ethnic minority groups in project activities and will be invited to participate in steering committee meetings. An international social and gender development specialist (4 person-months) and a national social development specialist (12 person-months) will support the Executing Agency. The ethnic minority strategy will be monitored as part of the overall system for the Project, and socioeconomic data will be disaggregated by gender and ethnicity. Progress reports will provide periodic updates on the effects of project outputs on ethnic minorities. The midterm review mission will consider past updates and make adjustments, as required.

Table A12.2: Anticipated Impacts and Proposed Actions on Ethnic Groups

Project Output Anticipated

Impacts Anticipated

Risks Proposed Actions to Enhance Impacts and Mitigate Risks Output 1: Improved Health Facilities New and Upgraded Health Facilities and Equipment Improved Water, Sanitation, and Waste Management

● Improved facilities and equipment for hospital services in ethnic minorities areas • Improved access to health facilities for ethnic minorities

● Minor: Ethnic minorities are not accessing the upgraded facilities.

● Budget made available for (i) screening of the potential impacts on ethnic groups, mitigating impacts, managing risks, and developing enhancement measures; and (ii) monitoring and evaluation activities disaggregated by gender, ethnicity, and income. • Incorporate ADB’s indigenous people checklist as part of the overall subproject preparation procedures. ● Consult with ethnic minority communities during subproject preparation and before the start of subproject construction. ● After upgrading, ensure ethnic minorities are informed of the new facilities and their right to free health care in the facility.

Output 2: Strengthened Provincial Human Resources Improved Provincial Human Resource Planning and Management Improved Provincial Training Capacity Improved Quality and Availability of Staff HRD Policy Studies Conducted

● Increased number of women and ethnic minority health workers in targeted communities • Improved quality of health workers serving ethnic minorities

• Minor: Individuals from the smaller ethnic groups do not meet the requirements to participate in training.

● HRD plans include strategies to increase the recruitment and promotion of ethnic minority staff. • Ensure provinces establish and reach targets for women and ethnic minorities in training courses at all levels. • Health workers trained to recognize and understand health-seeking behaviors of the relevant ethnic minorities. • Teaching materials will be gender and ethnically sensitive. • Use of interpreters with multilingual skills as necessary and feasible. • Health workers from and serving ethnic minority communities given priority for training. Participation records will be disaggregated by gender, ethnicity, and other appropriate information. • Targets for percentages of training participants and scholarship recipients from ethnic minority groups are proportional to the ethnicities of the local populations. • Ensure that ethnic minorities are targeted for scholarships for upgrading to bachelor level, postgraduate training, and preservice training, and receive at least 60% of scholarships. • Ensure that HRD planning capacity development specifically addresses ethnic minority issues.

Output 3: Improved Access to Health Care for the Poor

Appendix 2

20

Project Output Anticipated

Impacts Anticipated

Risks Proposed Actions to Enhance Impacts and Mitigate Risks Better Skilled VHWs in Remote Communes Health and Nutrition Promoted in Ethnic Minority Communes Reduced Barriers to the Health Care Funds for the Poor

● Improved basic health care for remote communes and ethnic minorities • Expanded and strengthened network of CHS staff, VHWs, and other volunteers in remote areas • Improved capacity of CHS staff, VHWs, members of mass organizations, and others to promote the health and nutrition of women and children • Reduced financial barriers and increased enrollment in health care services for poor and ethnic minority households

● Ensure there is one trained and fully resourced VHW in every remote ethnic minority community. • Develop and implement activities to link poor and ethnic minority communities with the commune and district health facilities. • Training and workshops open to all ethnic groups, and participation records disaggregated by gender and ethnicity. The percent of participants from small ethnic minority groups should be proportional to the ethnicity of the local population. • Teaching materials will be gender and ethnically sensitive and inclusive. • Ethnic minorities will be specifically targeted and included in the participatory approaches. • Development of innovative, creative, and culturally appropriate health promotion materials. • Development of innovative, context-specific information, education, communication messages, and media. • Public health materials translated into the relevant ethnic minority languages, where appropriate. ● Budget provided for (i) screening of potential impacts on ethnic minorities, mitigating impacts, managing risks, and developing enhancement measures; and (ii) monitoring and evaluation activities. ● Increasing awareness of Decision 139 among the intended beneficiaries and other local stakeholders. • Provide data and analysis to inform future policy making by the Ministry of Health related to Decision 139. ● Provide support for strengthening capacity in the south central coast region provinces to manage the provincial human care funds for the poor. • Provide training to ethnic minorities on how to use insurance cards.

Appendix 2

21

Project Output Anticipated

Impacts Anticipated

Risks Proposed Actions to Enhance Impacts and Mitigate Risks Output 4: Strengthened Provincial Health Systems Strengthened Provincial Health Systems Management Strengthened Hospital Management Better Health Management Information Systems Effective Project Management Support

• PMUs, with ethnic representation, will be established. • Capacity development of the PMU and PPMUs • Better information on health care and risks for ethnic groups

None • All provincial and district plans to incorporate programs and activities to meet health care needs of ethnic minority groups. • Updated 5-year provincial plans and medium-term expenditure frameworks to include the Project’s ethnic minority strategy. • Specific activities and targets for ethnic minorities to be included in provincial annual operating plans. • Teaching materials will be gender and ethnically sensitive and inclusive. • Target participation of ethnic minorities in training for provincial health officials and hospital managers and staff. • Improve health management information systems to better meet the health care challenges and needs of marginalized ethnic minority groups and ensure that data collected through those systems is disaggregated by gender and ethnicity. • Ensure that PPMU training includes topics relevant to managing the Project in ethnic minority areas. • Ensure that project surveys collect, analyze, and disseminate data disaggregated by gender and ethnicity. • By midterm, develop health sector gender and ethnic minority development plans for each of the provinces, based on lessons from project implementation. • An international social and gender development specialist (4 person-months) and a national social development specialist (12 person-months) will support the Government in project implementation. • A resettlement specialist (8 person-months) will assist the Executing Agency to protect the land and user rights of ethnic groups during land acquisition and resettlement. • Representative from the Committee of Ethnic Minority will be invited to participate in the project steering committee. • All progress reports, internal or external, will report on the impact the Project is having on ethnic groups.

ADB = Asian Development Bank, HRD = human resource development, PMU = (national) project management unit, PPMU = provincial project management unit, VHW = village health worker. Source: ADB.

22 Appendix 2

Table A2.1: Ethnic Minority Action Framework

Project Component Ethnic Minority

Objective Actions Proposed Target Groups Responsibility

Component 1: Leadership and strategy support for HIV/AIDS prevention among youth

To increase awareness and understanding of the risks faced by ethnic minority young people around HIV/AIDS

• Research activities to include component that focuses on issues relevant to ethnic minorities

• Provincial and community-focused leadership outreach activities to actively seek out ethnic minority leaders in provinces with significant ethnic minority populations

• Leaders at the national, provincial, and community levels

• PMU (gender focal point)

Component 2:

Mass media and enhanced interpersonal communication

To reach ethnic minority young and families with relevant HIV/AIDS prevention messages

• Formative research to include a specific component on identifying issues specific to ethnic minority populations

• Provincial radio broadcast spots to be in ethnic minority languages where significant population groups with a single language have been identified

• Young people from ethnic minorities

• Families of young people from ethnic minorities, particularly those vulnerable or at risk

• PMU to prepare TORs for contractor and review research and materials

• Mass media agency

Component 3: Community-based HIV/AIDS prevention

To reach young people from ethnic minorities and their families with HIV/AIDS-prevention messages, life skills training and materials for harm reduction

• In areas where ethnic minority groups are identified as >5% of the population, the PPMU will work with locally engaged NGOs to organize orientation training for community facilitators to identify mechanisms for enhancing ethnic minority participation in, and relevance of, services delivered

• Where ethnic minority groups are identified as >5% of the population, efforts will be made to ensure that at least one local NGO member is from the group and able to communicate easily with ethnic minority groups

• In provinces with significant ethnic minority populations, relevant IPC materials will be translated into major languages for effective communication with parents and other community groups and leaders.

• Young members of ethnic minorities that are vulnerable through migration, poor education levels, employment in high risk settings

• Families of young members of ethnic minorities likely to be vulnerable or at risk

• PPMU (ethnic minority focal points)

• Contracted NGOs (ethnic minority focal point as required by contract)

Component 4: Project management, capacity building, M&E

To enhance the capacity to consider ethnic minority issues in all M&E and associated studies

• Ensure ethnic minority-based themes are incorporated and reported across all project activities.

• PMU and PPMU and contractors

• National strategy implementers

• PMU (ethnic minority focal point)

• PPMU (ethnic minority focal points)

IPC = interpersonal communication, M&E = monitoring and evaluation, MOH = Ministry of Health, NGO = nongovernment organization, PMU = project management unit, PPMU = provincial project management unit, TOR = terms of reference. Source: Staff estimates.

Appendix 3

23

GENDER ACTION PLAN1

A project-specific gender action plan (GAP) has been formulated to promote the equal participation of all stakeholders as project beneficiaries and to highlight the special health needs of women in the south central coast region. The GAP is based on a gender analysis that was prepared for the Project and is designed according to the Asian Development Bank’s (ADB’s) Policy on Gender and Development (1998). A. Institutional and Legal Framework 2. A strong policy and institutional environment supporting gender equality has been instrumental in empowering Vietnamese women and reducing gender gaps. The National Committee for the Advancement of Women, a high-level multisectoral committee that reports directly to the President, is the formal state body responsible for promoting gender equality. The Viet Nam Women’s Union is a mass-based organization for women, facilitating implementation of projects and programs at the local level and representing their members in national policy dialogue. The newly issued Gender Equality Law, 2007, redresses gender disparities in existing laws, calls for gender mainstreaming in public administration, and provides for targets and quotas for women’s participation in decision making. Gender equality and improved health services for ethnic minorities are key priorities in the National Strategy on Reproductive Health Care for 2001–2010. B. Representation in Public Institutions 3. While significant improvements have been achieved, gender disparities in leadership still exist at all levels of government and women tend to be excluded from the decision-making process. Viet Nam has a high level of female representation in Parliament, but within the public administration’s central executive level very few women are represented in leadership positions. At the central level in 2005, only 6% of department directors and 14% of deputies were women. At local levels, women are almost invisible in leadership positions across departments and sectors. Slowly changing cultural norms and a lack of open and transparent recruitment and promotion practices are key causes for the low representation of women in leadership positions. At the provincial, district, and commune levels, these factors combine with lower educational qualifications and skills to prevent women from participating in leadership roles. C. Key Gender Issues in the Health Sector 4. The patterns of disease in Viet Nam differ substantially between men and women. Women are vulnerable to diseases associated with childbearing, while men have a greater incidence of accidents and injuries. There are also significant regional disparities in key health indicators, and women are particularly vulnerable in mountainous and remote communities. Gender development is intricately linked to issues of ethnicity and poverty, and ethnic minorities throughout Viet Nam, especially women and children, particularly lag behind. For instance, in ethnic minority communities in the central highlands, the burden of disease for females of reproductive age (15–44) is more than 25% higher than the national average.2 The 2001–2002 Viet Nam national health survey found that among women of reproductive age (18–34 years), prenatal care and immunization in ethnic minority groups was just two thirds that for the Kinh population. The maternal mortality ratio is 269 per 100,000 live births in mountainous and midland regions compared to 81 in the deltas, 81 among the Kinh ethnic majority compared to 316 among ethnic minorities, and 145 in rural areas compared to 79 in urban areas.

1 A full description of the Gender Action Plan and underlying issues is in the Report and Recommendation to the President (RRP). 2 Ministry of Health. Viet Nam Health Report, 2006. Ha Noi (p. 14).

Appendix 3

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5. Factors identified as contributing to maternal mortality are (i) delay in the decision to seek health care, (ii) delay in transferring women with obstetric complications to the appropriate facilities, (iii) delay in providing essential treatment, (iv) lack of well-trained health workers, and (v) lack of drugs and necessary equipment (footnote 1). The United Nations Population Fund assessment of three district hospitals in Ninh Thuan province found that (i) all hospitals were missing equipment and drugs to meet maternal and neonatal health care needs; (ii) two hospitals lacked resources to manage postpartum hemorrhage and could not transfuse blood or perform life-saving surgery; (iii) all hospitals lacked staff to cover emergencies at the commune health stations; (iv) ambulances were used to transport senior health officials and lacked emergency equipment; and (v) health providers lacked critical skills and knowledge to adequately manage obstetrics complications, resuscitate a newborn, or provide postnatal care. Women’s and children’s health is further compromised by limited access to preventive and curative services, misuse of self-medication, and lack of trust in modern medicine. The lack of knowledge about women’s rights and prevalence of traditional customs, laws, and practices also negatively affect women’s health and development (e.g., relating to early marriage and limited decision-making). 6. The proportion of female staff in the health sector is relatively high. In Quang Ngai, for instance, the staff is nearly 62% female in the provincial health service. Women tend, however, to be predominantly concentrated in the more poorly paid, lower levels of the system—as midwives, nurses, cleaners, clerical staff, and laboratory technicians. The directors of the provincial health services in Da Nang, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, and Khan Hoa are all males. Increasing the number of female hires and promotions to higher levels may be a significant contributor to increasing the focus and resources for women and ethnic minority health needs. D. Gender Action Plan and Implementation Arrangements

Table A11: Summary Gender Action Plan

Project Outputs Actions Proposed

Output 1: Improved Health Facilities National and provincial project management units (PPMUs) introduce the Project to province, district, and village representatives, both male and female. Identify vulnerable groups and households headed by women. Ensure that households headed by women, irrespective of ethnicity or income levels, will have equal access to participate in the Project. Ensure gender impacts on land acquisition and environmental concerns are considered, as described in resettlement plans and environmental examinations. Collect monitoring data disaggregated by gender, ethnicity, and income. Ensure that equal wages are paid to men and women laborers. Give priority to hospital civil works and equipment for improving quality reproductive health care to meet national standards and guidelines. Ensure that health facilities have adequate waiting areas and separate toilet facilities for men and women.

New and Upgraded Health Facilities and Equipment Improved Water, Sanitation, and Waste Management

Budget made available for screening of potential gender impacts and development of enhancement measures, as well as monitoring and evaluation activities disaggregated by gender, ethnicity, and income.

Output 2: Strengthened Provincial Human Resources

HRD plans to include: strategies to increase representation of women staff in managerial positions, budgetary allocations, implementation of national regulations regarding female employees, and the actions of managers to promote gender equality initiatives.

Improved Provincial Human Resource Planning and Management Improved Provincial Training Capacity

Ensure gender analysis of baseline data disaggregated by gender and ethnicity is used for HRD planning and to identify any gender gaps in wages and promotions.

Appendix 3

25

Project Outputs Actions Proposed

Establish mechanisms to promote women’s representation in decision-making processes. Ensure that provincial training capacity development includes a focus on gender needs and strategies. Organize separate meetings with women’s groups to identify specific needs for programs for women within the health sector. Ensure each province establishes and reaches targets for women and ethnic minorities in training courses at all levels. Training programs will include gender sessions and topics that disproportionately affect women. Teaching materials will be gender and ethnically sensitive and inclusive. Ensure that all training activities are gender balanced and that women’s representation is at least proportionate to their representation in the overall trainee pool. Disaggregate participation records by gender and ethnicity. Ensure that at least 50% of the scholarships for upgrading to bachelor level, postgraduate training, and preservice training are given to women. Ensure that every commune health station has a trained female staff member by 2010. Ensure availability to women of information, including to hold all public consultations and training at convenient times and locations giving consideration to women’s involvement in fieldwork, household chores, and other factors. Structure field visits and learning exchanges to accommodate the specific needs of women. Include budget for screening potential gender impacts and developing enhancement measures; as well as for monitoring and evaluation activities disaggregated by gender, ethnicity, and income.

Improved Quality and Availability of Staff HRD Policy Studies Conducted

At least two action-research grants for HRD focus on gender issues.

Output 3: Improved Access to Health Care for the Poor At least 50% of village health workers trained will be women. Teaching materials will be gender and ethnically sensitive and inclusive. Identify vulnerable groups (e.g., the disabled and ethnic minorities) and households headed by women. Consult with stakeholders (men and women) on their participation in the planning process and implementation, while specifically considering (so as not to overburden them) that women’s participation is balanced with other tasks. Develop and implement gender sensitive community mobilization and planning methodologies, including gender sensitive monitoring of activities. Organize separate meetings with women groups to identify specific training needs and programs for women. Develop innovative and culturally appropriate health promotion materials, information, education, communication messages, and media. Ensure availability to women of information, including to hold all public consultations and training at convenient times and locations giving consideration to women’s involvement in fieldwork, household chores, and other factors. Ensure that illiteracy is considered in all training and community meetings to ensure that the illiterate are not excluded from project interventions. Structure field visits and learning exchanges to accommodate the specific needs of women. Collect monitoring data disaggregated by gender, ethnicity, and income.

Better Skilled Village Health Workers in Remote Communes Health and Nutrition Promoted in Ethnic Minority Communes Reduced Barriers to Health Care Funds for the Poor

Include budget for screening potential gender impacts and developing enhancement measures; as well as for monitoring and evaluation activities disaggregated by gender, ethnicity, and income.

Output 4: Strengthened Provincial Health Systems Strengthened Provincial Health Systems Management

Ensure that all provincial and district plans incorporate programs and activities to meet health care needs of women and children.

Appendix 3

26

Project Outputs Actions Proposed

Updated 5-year provincial plans and medium-term expenditure frameworks to include project gender action plan. Specific gender activities and targets to be included in provincial annual operating plans. Teaching materials will be gender and ethnically sensitive and inclusive. Target 25% participation of women in training for provincial health officials. Target 25% participation of women in training for senior hospital managers and hospital department managers. Target that 25% of health system and hospital managers are female by 2012. Develop gender and ethnic sensitive and inclusive training manuals. Develop and conduct specialized training for women, including in leadership. Improve health management information systems to better meet the health care needs of women and ensure that data collected through those systems is disaggregated by gender and ethnicity. Ensure that PPMU training includes gender topics. Ensure that the baseline and end-of-project surveys collect, analyze, and disseminate data disaggregated by gender and ethnicity. By midterm, develop health sector gender and ethnic minority development plans for each of the provinces, based on lessons from project implementation. A community development specialist will be a member of the PPMU. Social and gender development specialists (international, 4 person-months; national, 12 person-months) will support project implementation.

Strengthened Hospital Management Better Health Management Information Systems Effective Project Management Support

All progress reports shall include a section which reports on the impact the project is having on women—positive and/or negative.

HRD = human resource development, PPMU = provincial project management unit. Source: Asian Development Bank 7. Implementation arrangements and estimated costs of the GAP have been integrated into the Project’s overall arrangements and total budget. The Ministry of Health will ensure that the GAP agreed between the Government and ADB is fully implemented and that gender strategies are followed in the resettlement plan and ethnic minority strategy. The project management unit (PMU) and provincial PMUs (PPMUs) will be responsible for implementing and monitoring the GAP. The international and national consultants will help conduct gender awareness training for project units, establish gender-disaggregated indicators for project performance monitoring and evaluation, and coordinate with other specialists during subproject preparation and implementation. The PMU will include information about progress of GAP activities in quarterly progress reports prepared and submitted to ADB and the Government. The PPMUs will submit gender updates to the PMU prior to preparing these reports.

Appendix 4

27

DETAILED COST ESTIMATES

Table A4.1: Cost Estimates by Expenditure Category

Source: Asian Development Bank estimates.

D billion $ million

Item Foreign

Exchange Local

CurrencyTotal Cost

Foreign Exchange

Local Currency

Total Cost

% of Total Base Cost

A. Investment Costs

1. Resettlement 0.0 13.8 13.8 0.0 0.9 0.9 1.2 2. Civil Works 84.2 323.7 407.9 5.2 20.3 25.5 31.2 3. Equipment and Vehicles 257.3 40.3 297.6 16.1 2.5 18.6 25.4 4. Drugs and Supplies 10.9 41.6 52.5 0.7 2.6 3.3 4.7 5. Staff Development 0.0 134.8 134.8 0.0 8.4 8.4 12.1 6. Workshops, Studies, Systems

Development 0.0 37.0 37.0 0.0 2.3 2.3 3.3

7. Consulting Services 23.4 33.4 56.8 1.5 2.1 3.6 5.1 8. Project Management 0.0 32.6 32.6 0.0 2.0 2.0 2.9 9. Taxes and Duties 0.0 27.7 27.7 0.0 1.7 1.7 2.5 Subtotal (A) 375.8 684.9 1,060.7 23.5 42.8 66.3 95.5 B. Recurrent Costs 1. Operations and Maintenance 5.0 42.4 47.4 0.3 2.6 3.0 4.3 2. Taxes and Duties 0.0 2.2 2.2 0.0 0.1 0.1 0.2 Subtotal (B) 5.0 44.6 49.6 0.3 2.8 3.1 4.5 Total Base Cost 380.8 729.5 1,110.3 23.8 45.6 69.4 100.0 C. Contingencies Subtotal (C) 33.4 101.6 135.0 1.9 6.4 8.4 12.1 D. Financing Charges Subtotal (D) 31.5 0.0 31.5 2.0 0.0 2.0 2.8 Total Project Cost (A+B+C+D) 445.7 831.1 1,276.8 27.3 52.0 79.8

Appendix 4

28

Table A4.2: Detailed Grant Cost Estimates by Financing Source ($ million)

ADB Government Item Cost Amount

% of Cost Category Amount

% of Cost Category

A. Investment Costs 1. Resettlement 0.86 0.00 0.0 0.86 100.0 2. Civil Works 26.64 21.37 80.2 5.27 19.8 3. Equipment and Vehicles 17.68 17.68 100.0 0.00 0.0

4. Drugs and Supplies 3.28 3.28 100.0 0.00 0.0 5. Staff Development 8.43 8.43 100.0 0.00 0.0 6. Workshops, Studies, Systems Development 2.31 2.31 100.0 0.00 0.0 7. Consulting Services 3.55 3.55 100.0 0.00 0.0 8. Project Management 2.04 2.04 100.0 0.00 0.0 9. Taxes and Duties 1.73 1.46 84.0 0.28 16.0

Subtotal (A) 66.53 60.12 90.4 6.41 9.6 B. Recurrent Costs 1. Operations and Maintenance 2.96 2.40 81.1 0.56 18.9 2. Taxes and Duties 0.14 0.11 78.9 0.03 21.1 Subtotal (B) 3.09 2.51 81.0 0.59 19.0 Total Base Cost 69.63 62.63 89.9 7.00 10.1 C. Contingencies 8.40 7.44 88.2 1.00 11.8 D. Financing Charges 1.93 1.93 100.0 0.00 0.0 Total Project Cost 80.00 72.00 90.0 8.00 10.0

ADB = Asian Development Bank. Source: Asian Development Bank estimates.

Appendix 4

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Table A4.3: Cost Estimates by Year, and Financier ($ million)

2009 2010 2011 2012 2013 Total

Item ADB Govt ADB Govt ADB Govt ADB Govt ADB Govt ADB Govt A. Investment Costs 1. Resettlement 0.00 0.80 0.00 0.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.86 2. Civil Works 1.87 0.46 6.42 1.58 8.02 1.98 4.25 1.05 0.81 0.20 21.37 5.27 3. Equipment and Vehicles 2.01 0.00 9.21 0.00 5.49 0.00 0.97 0.00 0.00 0.00 17.68 0.00 4. Drugs and Supplies 0.23 0.00 0.81 0.00 1.10 0.00 0.74 0.00 0.40 0.00 3.28 0.00 5. Staff Development 1.56 0.00 2.40 0.00 2.38 0.00 1.30 0.00 0.79 0.00 8.43 0.00 6. Workshops, Studies, Systems

Development 0.59 0.00 0.49 0.00 0.42 0.00 0.35 0.00 0.48 0.00 2.31 0.00

7. Consulting Services 0.82 0.00 1.16 0.00 0.95 0.00 0.53 0.00 0.09 0.00 3.55 0.00 8. Project Management 0.75 0.00 0.34 0.00 0.34 0.00 0.31 0.00 0.31 0.00 2.04 0.00 9. Taxes and Duties 0.18 0.02 0.48 0.08 0.49 0.10 0.24 0.06 0.07 0.01 1.46 0.28 Subtotal (A) 8.00 1.29 21.30 1.73 19.19 2.08 8.70 1.10 2.93 0.21 60.12 6.41 B. Recurrent Costs 1. Operations and Maintenance 0.15 0.04 0.15 0.04 0.39 0.09 0.70 0.16 1.00 0.23 2.40 0.56 2. Taxes and Duties 0.01 0.00 0.00 0.02 0.02 0.00 0.03 0.01 0.05 0.01 0.10 0.04 Subtotal (B) 0.16 0.04 0.15 0.06 0.41 0.10 0.73 0.17 1.05 0.25 2.49 0.60 Total Base Cost 8.16 1.33 21.45 1.79 19.60 2.18 9.43 1.27 3.98 0.46 62.61 7.01 C. Contingencies 1. Physical Contingencies 0.21 0.02 0.84 0.08 0.75 0.10 0.31 0.06 0.06 0.01 2.18 0.28 2. Price Contingencies 0.00 0.00 0.86 0.12 1.71 0.27 1.41 0.23 1.29 0.10 5.26 0.72 Subtotal (C) 0.21 0.02 1.70 0.20 2.46 0.37 1.72 0.29 1.35 0.11 7.44 1.00 D. Financing Charges 0.04 0.00 0.20 0.00 0.43 0.00 0.59 0.00 0.67 0.00 1.93 0.00 Total (A)+(B)+C)+(D) 8.41 1.35 23.34 1.98 22.49 2.55 11.74 1.56 6.00 0.57 72.00 8.00

ADB = Asian Development Bank, Govt = Government of Viet Nam. Source: Asian Development Bank estimates.

Appendi ixix 4 39 Appendix 4

Appendix 5

30

PROJECT MANAGEMENT AND IMPLEMENTATION STRUCTURE

Figure A5.1: Indicative Organizational Diagram

Appendix 6

31

IMPLEMENTATION SCHEDULE

2009 2010 2011 2012 2013 Activity 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

1. Improved Health Facilities 1.1.1 Resettlement 1.1.2 Review of hospital design standards 1.1.3 Construction design and bidding 1.1.4 Construction, new and upgrading 1.1.5 Preparation of equipment lists and bidding 1.1.6 Procurement of equipment and training 1.2.1 Improving water and waste management 1.2.2 Waste management training 2. Strengthened Provincial HRD 2.1.1 Develop provincial HRD plans annually 2.2.1 Teacher training annually 2.3.1 In-service training by 2013 2.3.2 Merit-based scholarships by 2013 2.3.3 Ethnic minority scholarships by 2013 2.4.1 HRD studies by 2012 3. Improved Access to Health Care for the Poor 3.1.1 Village health worker training design 3.1.2 Training of district and CHS staff 3.1.3 Re-training of VHWs 3.1.4 Training of new VHWs 3.2.1 Design health and nutrition promotion 3.2.2 Health and nutrition promotion program 3.3.1 Health care fund for the poor campaign 3.3.2 Fund system development and training 4. Strengthened Provincial Health Systems 4.1.1 Update provincial management manual 4.1.2 Provincial health manager training 4.1.3 Provincial health accounts 4.1.5 Provincial planning and budgeting 4.2.1 Introduction of hospital standards 4.2.2 Hospital manager training 4.3.1 HMIS design 4.3.2 HMIS training 4.4.1 Gender Action Plan and EMDP are included

in 5-year plan and annual plans 4.4.2 Provincial health and health services

surveys CHS = commune health station, HMIS = health management information system, HRD = human resource development, MOH = Ministry of Health, PMU = project management unit, VHW = village health worker. Source: Ministry

Appendix 7

32

Appendix 7

33

Appendix 7

34

Appendix 7

35

.

Appendix 8

36

PROCUREMENT PROCEDURES

1. Goods and Works to be financed by ADB will be procured in accordance with the “Procurement Guidelines” dated February 2007, as amended from time. 2. The EA shall revise and update the initial Procurement Plan in accordance with the Procurement Guidelines and the Consulting Guidelines as needed through out the implementation of the Project, so that each such subsequent Procurement Plan is provided to ADB upon each anniversary of the Effective Date. In the event that the Grant does not become effective within 8 months of ADB’s agreement to the initial Procurement Plan, the Recipient shall prepare a revised initial Procurement Plan and submit it to ADB for approval within 14 days of the Effective Date. 3. To the extent possible goods and works procurement will be procured through (i) international competitive bidding (ICB) for the procurement of Goods estimated to cost above $1,000,000 and Works above $4,000,000; (ii) national competitive bidding (NCB) for the procurement of Goods estimated to cost the equivalent of less than or equal $1,000,000 and Works less than or equal to $4,000,000 and; (iii) shopping for Goods costing not more than $100,000 and Works costing not more than $100,000. The PMU will handle all procurement using NCB. Shopping procedures may be used by the provinces, to be supervised by the PMU. National Competitive Bidding (NCB) 4. The EA may use National Competitive Bidding in accordance with the EA’s standard procurement procedures for the procurement of Goods estimated to cost the equivalent of less than or equal $1,000,000 and Works less than or equal to $4,000,000, as follows:

(i) Review the list of Goods and Works to bid based on the procurement plan.

(ii) The use of ADB-approved standard bidding documents for NCB is highly encouraged.

(iii) The draft invitation to bid shall be submitted to the Bank for approval.

(iv) Prepare draft bidding documents for Bank’s approval. ADB reviews first draft only.

(v) After obtaining Bank approval of the bidding documents, advertise the invitation to bid in a local English newspaper of national circulation or in a freely accessible website. The Bank should be furnished with a report on the advertising procedures followed and copy of the invitation to bid as issued and a copy of the newspaper advertisement as published shall also be enclosed with the report.

(vi) Issue the bidding documents to suppliers. Allow at least 4 weeks for the preparation of bids.

(vii) After public bid opening, a copy of the record and minutes of public bid opening shall be promptly sent to the Bank.

(viii) Examine the bids received to determine compliance with the bidding requirements. The substantially responsive bids will then be evaluated in accordance with terms and conditions laid out in the bid documents, and in line with the steps given in the Bank’s Handbook on Bid Evaluation. Compare the bid prices and select the lowest evaluated bid. Prepare the contract agreement and send to selected supplier.

(ix) Submit copies of the bid evaluation report, proposal for contract award and signed contract agreement to the Bank for post-review and preparation of PCSS.

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Shopping 5. Shopping will be used for the procurement of Goods estimated to cost not more than the equivalent of $100,000 and Works estimated to cost not more than the equivalent of $100,000. Procurement procedures through are as follows:

(i) Review the list of Goods and Works to bid based on the indicative procurement plan.

(ii) Issue requests for quotations to several suppliers (in the case of Goods) or from several contractors (in the case of Works). Request for quotations shall indicate the description and quantity of the goods or specification or works, as well as desired delivery (or completion), time and place. Quotations may be submitted by letter, facsimile, or by electronic means.

(i) Evaluation of quotations (at least 3) shall follow the same principles as of open bidding.

(ii) Submit copies of the quotations and proposal for contract award and signed brief contract agreement to the Bank for post-review.

6. A flowchart showing the main steps for procurement under NCB is attached marked as Figure A8.1.

Appendix 8

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Figure A8.1: Indicative Flowchart of Procurement under National Competitive Bidding 1

Procurement under National Competitive Bidding1

Executing Agency ADB Suppliers/

Contractors

Prepare list of goods/ Loan/advance contracting works to bid approved

(For contracts over $0.5M in goods and related services or $1.0M in civil works)

Prepare draft PQ documents 2 Advertise LCB contract packages and bid documents Concurrently with GPN in adb.org

ADB review, first contract only

Advertise locally and issue PQ documents2;

Inform ADB of advertisement (4 weeks notice to suppliers is Purchase PQ documents

acceptable) from EA; submit PQ application

Evaluate PQ applications and select and/or recommend

prequalified firms 2 EA notifies ADB of PQ results. 3 EA notification to prequalified

Issue bidding documents to and disquali fied firms prequalified suppliers

(4-week bidding period is acceptable) Purchase bidding documents and submit bids

Public bid opening; prepare record of public bid opening

Evaluate bids; prepare bid evaluation

report; proceed to and or recommend contract award.3

Prepare Contract Agreement and Return signed contract to EA;

send to supplier. Provide performance security

Send at least one English version of ADB post review, salient features of signed contract if approved, prepare PCSS. 3

to ADB Execute contract

Supervise and monitor contract 1 While NCB procedures are not required to be identical with ADB’s ICB procedures, they must reflect the underlying

principles and not contravene ADB’s Procurement Guidelines. 2 Prequalification is discouraged for NCB. DMCs may have a register of suppliers. The processing mission should

ensure that the registration system is acceptable to ADB (e.g., it reflects the underlying principles of ADB’s Procurement Guidelines); and where acceptable, a PQ may not be required.

3 If the prequalifcation or procurement requires prior consideration of the procurement committee, in accordance with PAI 3.11, the EA must be advised not to notify prequalified firms or award contract prior to the committee’s deliberations and subsequent ADB approval.

Appendix 9

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INDICATIVE LIST OF TRAINING ACTIVITIES

Training Course Trainees Number Duration Output 1 1. Building Maintenance Building maintenance

supervisors 63 2 days

2. Equipment Maintenance Hospital staff 465 2 days 3. Infection Control Doctors, nurses, paramedics,

attendants 2,120 1 day

4. Waste Management Hospital staff 840 2 days Output 2

1. Training on HRMIS HRD staff 80 2 days 2. Masters in Nursing Nurses 16 2 years 3. Teacher Training (attachment) SMS teachers 48 2 months, at university

4. Supervision Course University teachers 25 2 days, Ha Noi 5. Training of Master Trainers in

Quality of Care Provincial/district staff 88 2x5 days

6. Training of District Trainers in

Quality of Care District staff 415 2x5 days

7. Quality of Care in DH District staff 3,040 2x5 days 8. Quality of care in CHS CHS staff 3,435 2x5 days 9. Training in Supportive Supervision Supervisors 400 2 days 10. Pre-service Training Ethnic minority students 160 2-3 years 11. Bridging Courses Ethnic minority students 80 1-2 years 12. Upgrading Training to Degree Nurses, paraprofessionals 64 2 years, at university

13. Masters or 1st Degree

Doctors, nurses, pharmacists 64 2 years, at university

14. Continuous Education Training Doctors, nurses, pharmacists 56 2 hours Output 3

1. New VHWs VHWs candidates 1,692 4x1 week 2. Refresher Training of VHW VHWs 6,768 4x2 days

3. TBA Training in Safe Motherhood/Clean Delivery/Referral

TBA 200 3 months

4. Ethnic Minority Language Training CHS staff 200 2 weeks 5. Community Mobilization Local leaders 830 1 day 6. Facilitators of Community-based

Health Promotion Community members, CHS staff

300 3 days, 3x1 day (follow up)

7. HCFP Managers 83 3 days 8. HCFP Accountants 83 5 days

Output 4 1. Masters in Health Management Public health managers 16 2 years, at university 2. Management & Leadership Provincial, district managers 48 2x2 weeks 3. Financial Management Provincial, district managers 48 2 weeks 4. Management & Leadership Provincial, district hospital

managers 106 2x2 weeks

5. Financial Management Hospital managers 200 2 weeks 6. Quality Management Hospital managers 200 2 weeks 7. Health Management Information

Systems Provincial, district managers 48 1 week

8. Hospital HMIS Hospital managers 200 1 week 9. Hospital HMIS Clerks 800 3 days 10. Project Management Project staff 22 1 month

CHS = commune health station, DH = district hospital, HCFP = health care funds for the poor, HMIS = health management information system, HRMIS = human resource management information system, VHW = village health worker.

Appendix 10

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SUMMARY OF CONTRACT I. PROJECT DATA

A. Loan No. : B. Executing Agency :

II. OUTLINE OF CONTRACT

A. Contract No. : B. Total Contract Amount C. Contractor’s Name and Address : D. Scope of Contract :

III. SUMMARY OF CONTRACT AGREEMENT

A. Contract Amount : B. Taxes and Duties : C. Contract Period

Date of Contract Signing : Contract Period : Commencement Date : Completion Date :

IV. RESULT OF BIDDING

A. Mode of Procurement : B. Date of Bid Invitation : C. Date of Bid Opening : D. Ranking/List of Bidders :

Rank Name of Bidders Bid

No. Amount of Bid

As Opened Amount of Bid As Evaluated

1 2 3 4

Note: Please provide a brief explanation if the contract was not awarded to the lowest bidder.

V. COUNTRY/COUNTRIES OF ORIGIN (for Goods only):

Seen and Approved: Name Project Director

Appendix 11

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DISBURSEMENT MODALITIES 10

I. PAYMENT PROCEDURES

A. Direct Payment Procedure (page 24 of the Handbook) 1. ADB pays the designated beneficiary, at the request of the Recipient, from the loan funds. 1. Supporting Documents for Direct Payment

(i) Signed Withdrawal Application (ADB-DRP/RMP, Appendix 5 of Handbook); (ii) Summary Sheet (ADB-DRP/RMP/IFP-SS, Appendix 8 of Handbook); (iii) Contract or confirmed purchase order, indicating amount and due date; (iv) For payment of goods: supplier's invoice and bill of lading or other similar

documents; and (v) For payment of services: consultants’ claim or invoice

B. Commitment Procedure (page 26 of Handbook) 2. This procedure is used for financing import of goods. A letter of credit is usually opened by a commercial bank. The negotiating bank is authorized to seek payment from ADB under the loan. 3. ADB issues a Commitment Letter against a letter of credit (L/C), and agrees to pay (on behalf of the Recipient and out of loan funds) the negotiating bank for the payments made or to be made to the supplier in accordance with the terms of the L/C. 1. Supporting Documents for Issuing Commitment Letter

(i) Signed Application for Commitment Letter (ADB-CL, Appendix 6 of Handbook); (ii) Summary Sheet (iii) Contract or confirmed Purchase Order; (iv) Two signed copies of L/C.

4. ADB issues a Commitment Letter to the designated commercial bank (usually advising bank) as shown in Appendix 15 of Handbook. A copy of ADB’s commitment letter is also sent to the EA for information. 2. ADB’s Payment to the Negotiating Bank 5. The Commitment Letter provides for ADB’s payment to the negotiating bank upon receipt of the reimbursement claim confirming that negotiation has been done in full compliance with the letter of credit terms. Such reimbursement claim is usually made by tested telex or authenticated SWIFT message. 3. Amendment to the Letter of Credit 6. ADB’s approval is required for amendment to the letter of credit (L/C) involving:

(i) terms of payment including currency and amount of L/C; (ii) the description or quantity of goods; (iii) beneficiary; (iv) country if origin; and (v) extension of the expiry date of L/C beyond the loan closing date.

10 ADB. January 2007. Loan and Disbursement Handbook. Manila.

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7. Amendments not mentioned above do not require ADB’s approval. For example, extension of L/C expiry date within loan closing date does not require ADB’s approval, but simply inform ADB of such extension by filling out the form shown as Appendix 17 of Handbook and attaching one copy of the amendment. C. Reimbursement Procedure (page 30 of Handbook) 8. ADB pays to the project account for eligible expenditures which have been incurred and paid for by the Government out of its budget allocation or its own resources (page 30 of Handbook). 1. Supporting Documents for Reimbursement Procedure

(i) Signed Withdrawal Application (ADB-DRP/RMP, Appendix 5 of Handbook); (ii) Summary Sheet (ADB-DRB/RMP/IFS-SS, Appendix 8 of Handbook); (iii) Contract or confirmed Purchase order, if not yet submitted earlier to ADB; and (iv) Evidence or receipt of payment showing the amount paid, the date of receipt and

the payee. D. Statement of Expenditure (SOE) Procedure 9. This is a procedure requiring no submission of supporting documents. Any individual payment to be reimbursed or liquidated under the SOE procedure shall not exceed $100,000 (including counterpart fund). The procedure derives its name from the Statement of Expenditure (SOE) form, which is submitted with the Withdrawal Application (W/A). The SOE is used in lieu of the usual supporting documents and the Summary Sheet. It may also be used in connection with the liquidation or replenishment of the Imprest Account (page 39 of Handbook). 10. Three types of SOE are available:

(i) SOE form for contract items, mostly related to civil works (Appendix 22 and 23 of Handbook);

(ii) SOE form for noncontract items, mostly related to operating expenses and overhead (Appendix 24 of Handbook); and

(iii) SOE form (free format) for items not provided in the other SOE forms (Appendix 25 of Handbook).

E. Instructions for Withdrawal 11. Before the first W/A is submitted to ADB, the name of the authorized representative(s) must be provided to ADB, through the Authorized Representatives of the Recipients, including the authenticated specimen signatures of the representative(s). 12. The W/A should be signed by the authorized representative(s), sequentially numbered and should not exceed five digits (00001, 00002, etc.) 13. The cover letter of the W/A should include a sentence reconfirming that the contracts were awarded on the basis of tax exemption to ensure expeditious loan disbursement by ADB. 14. The W/A forms and summary sheets to be used vary for the different procedures. A separate W/A for each currency requested should be submitted. 15. The W/A to be submitted to ADB must be the signed original copy. However, supporting documents may be in photocopies.

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16. Before a disbursement is made for any contract issued by the Recipient, ADB has to prepare a Procurement Contract Summary Sheet (PCSS). Copies of all signed contracts and supporting documents should be sent to ADB as soon as they are available. This is a basis for ADB to monitor performance of against the projected annual activities made at the start of each year. A PCSS number will be assigned by ADB for each contract received and these data will be relayed to EA. The PCSS serves as an acknowledgment by ADB that the award of a contract has been checked and has been found to comply with ADB’s procurement guidelines. It also serves as a basis for disbursement. The PCSS is also numbered sequentially, not exceeding four digits, i.e. 0001, 0002, etc. The PCSS consists of following basic information:

(i) ADB Contract No. or the PCSS No. (ii) Date of ADB approval of the Award of Contract (iii) Date of Contract Approval by the EA (iv) Mode of Procurement (v) Name of contractor or supplier (vi) Terms of payment and currency of contract (vii) Component to which the expenditures will be charged

17. Without the PCSS, ADB’s Controller's Department could not proceed with the processing of payment for the W/A. 18. When an amendment or a variation of a contract is made, a copy of the variation order should also be sent to ADB, for updating of the PCSS. 19. To avoid delay in the processing of payment, the PCSS No. should be indicated in the W/A to be submitted by the EA. The PCSS No. should be shown in the summary sheet.

II. PROCEDURES FOR ESTABLISHING AND OPERATING THE LOAN IMPREST ACCOUNT

A. Definition 20. Whenever used in this procedure, unless the context otherwise requires, several terms defined in the Loan Agreement between the Recipient and the Asian Development Bank (ADB) have the respective meanings therein set forth. B. Imprest Account for Loan Proceeds 21. For the purpose of this project, the Recipient through the Executing Agency shall cause (i) the Project Management Unit (PMU) to establish after the Effective Date, an Imprest Account at a commercial bank acceptable to ADB, and (ii) the Provincial Project Management Unit (PPMU) to establish a second generation imprest accounts (SGIA) at a provincial treasury acceptable to ADB. The Imprest Account and each SGIA shall be established, managed, replenished and liquidated in accordance with ADB’s “Loan Disbursement Handbook” of January 2007, as amended from time to time and detailed arrangement between Viet Nam and ADB. Since the Imprest Account/SGIAs will be established at a commercial bank, a comfort letter is required to be submitted as per Section 10.18 and Appendix 32 of the Handbook.

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C. Eligible Expenditures 22. Payments out of the Imprest Account/SGIAs will be made exclusively to meet eligible expenditures in accordance with the provisions of Schedule 3 of the Loan Agreement. D. Account Name and Authorization for Withdrawals 23. The Imprest Account will be opened and maintained at a commercial bank acceptable to ADB, in the name of the PMU and the person or persons duly authorized by PMU for making withdrawals from the Loan Account, under relevant provisions of the Loan Agreement will be responsible for operating the Imprest Account and withdrawals and payments therefrom.

E. Initial Advance and Ceiling

24. After the Effective Date, on the basis of a Withdrawal Application-Imprest Fund (Form ADB-IFP) and an Estimate of Expenditure Sheet (Form ADB-IFP-EES) from the PMU setting out the estimated expenditures for the first six months of project implementation, and submission of evidence satisfactory to ADB that the Imprest account has been duly opened, ADB will withdraw from the Loan Account and deposit into the Imprest account an initial amount based on the estimated expenditure for the first 6 months of project implementation or US$4,000,000. The initial amount to be deposited into each of the SGIAs shall be equivalent to 6 months estimated expenditure, but in any event not exceeding the equivalent of $250,000. F. Liquidation and Replenishment 25. The PMU will, on a regular basis, furnish to ADB in respect of all payments out of the Imprest Account, the duly filled-in Withdrawal Application-Imprest Fund (Form ADB-IFP) and Summary Sheet (ADB-DRP/RMP/IFP-SS), together with such supporting documents and other evidence as ADB will reasonably request, showing that each payment was made for eligible expenditures. ADB agrees to the use of the Statement of Expenditure (SOE) procedure for expenditures incurred not exceeding US100,000. 26. For every liquidation and replenishment request, the PMU will furnish to ADB (a) Statement of Account (Bank Statement) prepared by commercial banks, and (b) the Imprest Account Reconciliation Statement (IARS) reconciling the abovementioned Bank statement against the PMU’s records following the format provided in Annex 1. 27. The PMU should ensure that every liquidation and replenishment of each SGIA should be supported with (a) the Statement of Account (Bank Statement) prepared by the bank where the SGIA is maintained, and (b) the Second Generation Imprest Account Reconciliation Statement (SGIARS) reconciling the abovementioned Bank Statement against the SGIA’s records following the format provided in Annex 2. As stated in the Schedule 3 of the Loan Agreement, the Recipient shall ensure that no disbursement of Loan proceeds shall be made to a specified SGIA until: (i) the action plan, including the proposed budget for the specified Project province has been approved by the PMU; and (ii) any misprocurement or other irregularity has been corrected by the concerned PPMU or Project province to the satisfaction of the Recipient and ADB, in circumstances where any misprocurement has occurred or other procurement action by the PPMU or a specified Project province has been identified by ADB as irregular. 28. ADB may at any stage by notice to the PMU, suspend further replenishments to the Loan Imprest Account if they failed to comply with any of the provisions of this Attachment.

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G. Accounts and Records 29. The PMU/PPMU will ensure that all amounts received for or in connection with the Loan Imprest Account/SGIAs and amounts withdrawn therefrom are recorded in a separate account in accordance with consistently maintained sound accounting principles. The PMU will retain until one year after the closing date for withdrawals from the Loan account all accounts and records including orders, invoices, bills, receipts and other original documents evidencing the expenditures paid out of the Imprest Account, and will enable ADB's representatives to examine such account and records during disbursement and review missions. H. Audit 30. The PMU will cause an independent auditor or government auditor acceptable to ADB to annually audit the Imprest Account/SGIAs and records referred to in Paragraph 10 above and furnish to ADB certified copies of audit report and audited financial statements not later than 6 months after the end of each fiscal year. An opinion on the examination of the Imprest Account and SGIAs should be separately set out in the said Auditor’s Report. I. Ineligible or Unjustified Payment 31. Where any withdrawal or payment from the Loan Imprest Account/SGIAs is determined by ADB (i) to have been utilized for any purpose not eligible, or (ii) not justified by the evidence furnished pursuant to Paragraph 10 of this Attachment, the PMU/Project provinces will, promptly upon notice from ADB, deposit into the Loan Imprest Account/SGIAs an amount equal to the amount of such payment or the portion thereof not eligible or justified, in the same currency as that in which the amount was withdrawn from the Loan Account. Alternatively, ADB may offset the unjustified payment against new withdrawal applications for replenishment. J. Closing of the Imprest Account 32. In the event that ADB determines that (i) any amount outstanding in the Loan Imprest Account will not be required to cover further payments for eligible expenditures, or (ii) any amount remains outstanding in the Loan Imprest Account after the closing date, PMU will, promptly upon notice from ADB and unless otherwise agreed by ADB, refund such amount then outstanding in the Loan Imprest Account. K. Other Issues 33. For matters not covered in the Attachment, the guidelines set forth in ADB's Loan Disbursement Handbook will apply.

III. STATEMENT OF EXPENDITURES (SOE) PROCEDURE

A. Definition

34. Pursuant to Paragraph 6(b) of Schedule 3 of Loan Agreement, you may use the SOE procedure whereby an application for replenishment or liquidation of the Imprest Account is supported by Statement of Expenditures, in lieu of the normal full documentation. Under the SOE procedure you are required to submit to ADB together with the Withdrawal Application (Form ADB-IFP), a Statement of Expenditures (ADB-SOE-SS), duly certified by persons authorized to sign

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withdrawal applications. The SOE form would be submitted in place of the usually required supporting documents such as invoices, contractors’ bills, bills of lading and or other related documents. B. SOE Limit

35. SOE procedure will be used in respect of payments out of the Imprest Account for eligible expenditures not exceeding $100,000 per individual payment. C. Supporting Documents

36. The SOE, a special reimbursement procedure of ADB has been approved for use of the Project on the condition that all relevant supporting documents will be retained by PMU and will be made available for examination by the ADB's representatives during field missions. In addition, the PMU is required to maintain proper accounting records of SOE expenditures to facilitate verification of these expenditures against supporting documents. D. Ineligible Expenditures

37. Where ADB subsequently finds any payment made under the SOE procedure to be insufficiently supported or ineligible for ADB financing, ADB may offset the amount of the unjustified or ineligible payment against subsequent withdrawals for reimbursement or request the PMU/Project provinces to refund the same amount to the Loan account. E. Audit

38. The SOE records must be audited regularly by independent and qualified auditors acceptable to ADB. The audit is carried out as part of the regular annual audit of the Project’s accounts. A separate opinion should be included in the annual audit report.

Appendix 12

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SUGGESTED OUTLINE FOR QUARTERLY PROGRESS REPORTS

1. Introduction 1.1 Summary 1.2 Loan Data 1.3 Project scope 1.4 Project benefits 1.5 Estimated Project Cost (a) Project Cost (b) Expenditure Projections 2. Project Organization and Management11 2.1 Implementation Arrangements 2.2 Establishment of PMU, PPMU and Project Steering Committee 2.3 Organization and staffing of PMU and PPMU 3. Assessment of Implementation Progress

3.1 Assessment of progress made during the reporting period (by Project component) 3.1.4 Project Management, Capacity Building, Monitoring and Evaluation 3.2 Problems encountered and remedial actions taken or proposed to be taken

3.3 Proposed program of activities during the next quarter 3.4 Implementation Schedule

3.5 Percentage of Implementation Progress (See Appendix 13, PAM, for computation)

4. Recruitment and Performance of Consultants 4.1 Summary on status of recruitment of consultants 4.2 Details of consultants’ input and general performance

5. Procurement of Vehicle and Equipment. Update list of goods to bid (from procurement plan). 5.1 List of contract packages, indicating the following:

(i) procurement procedures to be used (ii) value of contracts (estimate) (iii) specifications

5.2 status of preparation of bid documents 5.3 schedule for advertising of bid invitations 5.4 bid evaluation 5.5 status of contract awards

6. Operation and Maintenance of Equipment

7. Training Programs Provide a brief summary on the status of identification of types of training to be undertaken, selection criteria for candidates, venue of training, cost of training, number of participants, and schedule of training.

7.1 Training courses undertaken during the quarter, training costs, etc. 7.2 Training courses scheduled to be undertaken next quarter, cost estimates, etc.

11 Section 1: Introduction and Section 2: Project Organization and Management should be reported for the first

submission of Quarterly Progress Report and need not be included in the subsequent Report unless changes have occurred.

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8. Administration and Finance 8.1 Budget allocations and counterpart funding arrangements (Provide a schedule of

counterpart funds allocated and disbursed during the reporting period and projection for the next quarter).

8.2 Project disbursements 8.3 Financial position of the Project, such as loan savings, cost overruns/underruns 8.4 Status of Imprest Fund Account

9. Compliance with Covenants/Government Assurances 9.1 Major Loan Covenants and Status of Compliance, including those associated with sector reform initiatives and EA reforms, financial management, and social dimensions 9.2 Government Assurances and Status of Progress

10. Special Features. Provide a brief status report on the following: 10.1 5-year provincial plan and expenditure framework 10.2 Health management in critical areas 10.3 Provincial planning and management capacities 11. Appendixes (Worksheets, Charts, Tables, or Schedules)

Appendix 13

49

FRAMEWORK AND GUIDELINES IN CALCULATING PROJECT PROGRESS

A. Introduction

1. To ensure that all implementation activities are reflected in measuring implementation progress against the project implementation schedule, the term "physical completion” in the PPR has been changed to "project progress.”

2. Physical and pre-commencement activities are considered in calculating project implementation progress. These activities, which may include recruitment of consultants, capacity building, detailed design, preparation of bid and prequalification documents, etc., could constitute a significant proportion of overall implementation and therefore should be counted.

3. Each activity in the implementation schedule will be weighted according to its overall contribution (using time as a reference) to progress of project implementation. These weights will then be used to calculate the percentage of project progress along the entire time span of the project. This is to provide a holistic view of the pace of implementation.

B. Framework for Compiling Activity List and Assigning Weights

4. As implementation activities (with corresponding weights) will vary in terms of project, sector, and country, SESS will be responsible for incorporating them in the project administration memorandum. The actual project implementation progress of these activities should be reported regularly through the EA’s quarterly project progress report. To ensure ADB-wide consistency, the following framework has been established. The application of this framework will be monitored through the PPR.

1. Compilation of Activity List 5. SESS should identify and include major implementation activities in the implementation schedule which is attached as an appendix in the report and recommendation of the President (RRP). The implementation schedule should follow the critical path of the project’s major activities in project implementation taking account of various country, sector, and project constraints. 2. Assignment of Weights 6. Corresponding weights for each activity should be assigned to ensure that “project progress" measures the percentage of achievement (nonfinancial except when the project has credit components) for all events during the entire duration of the implementation schedule. To avoid disproportionate assignment of weights, to the extent possible these should be evenly distributed along the implementation schedule. When activities are concurrent, avoid “double counting.”

3. Computation of Project Progress 7. Once all activities are identified and corresponding weights assigned, project progress should be calculated using the following steps:

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50

(i) Determine the actual percentage progress (non-financial) of each activity. (ii) Multiply these percentages by the assigned weight of each activity to arrive at the

weighted progress. (iii) Add up the resulting weighted progress of all activities to determine the project progress. The second page of this Appendix provides an illustration of this calculation using a generic

sample implementation schedule, and the third page shows a specific schedule for this Project.

Appendix 13

51

Implementation Schedule with Activities and Weights

Yr1 Yr2 Yr3 Yr4 Yr5

A

a

B

b

Cd

c

De f

E

A C

T I

V I T

I E

S

1. Sum of all weights should equal 100 percent (a+b+c+d+e+f+g = 100%)2. When calculating the percentage of “project progress,” all completed activities should be counted as accomplished, regardless of when they

were scheduled to be completed. For example, when calculating the percentage of “project progress” after year 3, if activity D is completed inyear 3 rather than in year 2, it should still be included in the computation.

3. Total weight of each activity is as follows: Activity A–a; Activity B–b; Activity C–c; Activity D–d; and Activity E–e + f +g4. Project progress of a project is the summation of the actual percentage of progress for each activity multiplied by the total weight of each

activity.

Appendix 14

52

PERCENTAGE OF PROJECT IMPLEMENTATION PROGRESS12

No. Description Weight (a) Progress (b)

Weighted Progress

(a)/(b) I. Initial Activities 10 - Establish PMU, PPMUs 3 - Loan Negotiations/Signing/Effectiveness 3 - Select and Engagement of: - International Consultants 3 - Domestic Consultants 3 II Component 1: Improved Health Facilities

22

III Component 2: Human Resources Development

22

IV Component 3: Access to Quality Health Care

22

V Component 4: Provincial Health Systems Management

22

Total Weight and Progress 100

12 Suggested format only.

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53

PROJECT COMPLETION REPORT FORMAT A. General Guidelines for Preparing Project Completion Report CONTENTS BASIC DATA MAP13 I. PROJECT DESCRIPTION II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation B. Project Outputs C. Project Costs D. Disbursements E. Project Schedule F. Implementation Arrangements G. Conditions and Covenants H. Consultant Recruitment and Procurement I. Performance of Consultants, Contractors, and Suppliers J. Performance of the Recipient and the Executing Agency K. Performance of the Asian Development Bank

III. EVALUATION OF PERFORMANCE

A. Relevance B. Efficacy in Achievement of Purposes C. Efficiency in Achievement of Outputs and Purpose D. Preliminary Assessment of Sustainability

IV. EVALUATION OF SOCIAL DIMENSIONS AND SOCIAL SAFEGUARDS IMPACTS A. Social Dimensions (e.g. poverty reduction, gender equity, community and participatory mass organizations) B. Ethnic Groups Development Impacts V. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment B. Lessons Learned C. Recommendations

13 A revised map showing the impact of the project is to be included. Do not use the map in the Report and

Recommendation of the President (RRP).

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BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Recipient 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number

(to be provided by ADB)

B. Loan Data 1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – No Interest – No repayment – Grace Period (number of years)

8. Disbursements a. Dates Initial Disbursement

Final Disbursement

Time Interval

Effective Date

Original Closing Date

Time Interval

Appendix 15

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Category Component Original Allocation

Last Revised

Allocation Net Amount Disbursed

Undisbursed Balance

Total C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost Total

2. Financing Plan ($ million)

Appraisal Estimate Actual Cost Foreign Total Foreign Total

Implementation Costs ADB-Financed Government Total 3. Cost Breakdown by Project Component ($ million) Appraisal Estimate Actual

Cost Foreign Totala Foreign Total TOTAL PROJECT COST

Note:

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4. Project Schedule Item Appraisal Estimate Actual Date of Contract with Consultants Equipment and Supplies Dates First Procurement Last Procurement Completion of Equipment Installation Start of Operations Other Milestones Start of Program Completion of Program D. Data on Asian Development Bank Missions

Name of Mission Date No. of Persons

No. of Person-Days

Specialization of Membersa

Fact-Finding Appraisal Inception Review Review Review Review Midterm Review Review Review Review Review Completion Reviewb Note: a May use reference letters in table, e.g., a - engineer, b - financial analyst, c - counsel, d - economist, e -

procurement consultant or specialist, f - control officer, g – assistant project analyst. b The project {loan} completion report was prepared by {name}, {designation}.

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B. Suggested Topics for Project Completion Reports to be Prepared by Borrowers I. PROJECT DESCRIPTION

A. Objectives B. Components C. Implementation methods D. Description and justification of changes in components (or subproject appraisal

criteria) or implementation methods II. PROJECT IMPLEMENTATION

A. Compare original and actual implementation schedules. Indicate delays, length and causes of delays, and remedial action taken.

B. Compare cost estimates made during appraisal and actual costs. The costs financed by cofinanciers must be compiled correctly with reference to audited project accounts. Indicate factors that contributed to any significant overruns or underruns.

C. State problems or difficulties in recruiting consultants, with reference to ADB procedures. Assess the consultant's work and the working relationship between the executing agency (EA) and the consultant. Use of a logical framework is strongly recommended.

D. State problems or difficulties encountered in procuring goods and services (including civil works) with reference to ADB procedures. Assess the supplier's or contractor's performance under the contract.

E. Give the extent of compliance of the borrower and EA with Loan covenants, with reasons for noncompliance or delays in compliance and the remedial actions taken.

F. State reasons for any delays in Loan utilization. Evaluate the appropriateness of the disbursement methods used. Justify the reallocation of Loan proceeds.

G. State problems or difficulties with subproject appraisal. Evaluate the EA’s performance and capacity to appraise subprojects.

III. INITIAL OPERATIONS

A. Describe initial operations of the project and transitional problems encountered

from project completion to initial operations. B. Describe measures taken to ensure continued smooth operation of the project

relative to management, staffing, funding, and maintenance of project facilities. C. Analyze the prospects of the project benefits being realized.

IV. EVALUATION OF THE ASIAN DEVELOPMENT BANK’S PERFORMANCE A. Assess ADB's performance in supervising project implementation. Include comments on the adequacy of the consultants’ terms of reference and appropriateness of specifications in tender documents. Evaluate the effectiveness and timeliness of assistance extended by ADB to solve implementation problems. B. Comment on problems encountered with ADB's procedures. Note the measures taken to resolve these problems and suggest changes in procedures and requirements.

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FINANCIAL REPORTING AND AUDITING REQUIREMENTS

1. ADB's Handbook for Borrowers on the Financial Governance and Management of Investment Projects Financed by the ADB (the Booklet) provides guidelines to ensure timely compliance with the loan covenants and the quality of financial information as required by ADB. 2. ADB, by its Charter, is required to ensure that the proceeds of any loan/grant made, guaranteed, or participated in by ADB are used for the purposes for which the loan/grant was approved. ADB requires accurate and timely financial information from its borrowers/recipients to be assured that expenditure was for the purposes stated in the loan/grant agreement. 3. The following are the main requirements:

(i) ADB requires the EA to maintain separate project accounts and records exclusively for the Project to ensure that the grant funds were used only for the objectives set out in the Loan Agreement.

The first set of project accounts to be submitted to ADB covers the fiscal year ending 31 December 2009. As stipulated in the Loan or Project Agreements, they are to be submitted up to 6 months after the end of the fiscal year. For this loan, the deadline is by 30 June 2010. A sample report format with explanatory notes is attached as Annex A.

(ii) The accounts and records for the project are to be consistently maintained by

using sound accounting principles. The external auditor is to express an opinion on whether the financial report has been prepared using international or local generally accepted accounting standards and whether they have been applied consistently.

ADB prefers project accounts to use international accounting standards prescribed by the International Accounting Standards Committee. The name of external auditor is to comment on the impact of any deviations, by the Executing Agency from international accounting standards.

(iii) The external auditor specifies in the Auditor's Report the appropriate auditing

standards they used, and direct them to expand the scope of the paragraph in the Auditor's Report by disclosing the key audit procedures followed. The external auditor is also to state whether the same audit procedures were followed for all supplementary financial statements submitted.

ADB wishes that auditors conform to the international auditing standards issued by the International Federation of Accountants. In cases where other auditing standards are used, the external auditor is requested to indicate in the Auditor's Report the extent of any differences and their impact on the audit.

(iv) The external auditor's opinion is also required on whether

• the proceeds of the ADB's loan have been utilized only for the project as

stated in the Loan Agreement; • the financial information contains data specifically agreed upon between

the Recipient or EA and ADB to be included in the financial statements;

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• the financial information complies with relevant regulations and statutory

requirements; and • compliance has been met with all the financial covenants contained in the

Loan or Project Agreements.

(v) The Auditor's Report is to clearly state the reasons for any opinions that are qualified, adverse, or disclaimers.

(vi) Actions on deficiencies disclosed by the external auditor in its report are to be

resolved by the Recipient or Executing Agency within a reasonable time. The external auditor is to comment in the subsequent Auditor’s Report on the adequacy of the corrective measures taken by the Recipient or EA.

4. Compliance with these ADB requirements will be monitored by review missions and during normal project supervision, and followed up regularly with all concerned, including the external auditor.

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ANNEX A: SAMPLE FORM OF AUDITOR’S OPINION

Imprest Account

We have examined the Statement of Imprest Account of Loan No. 2468-VIE for the period 1 January to 31 December 2009, pursuant to the Agreement signed between the Government and the Asian Development Bank on 16 December 2008.

Our examination was made in accordance with generally accepted auditing standards

emphasizing on the adequacy and completeness of the supporting documents of the Imprest Account and other auditing procedures as we considered necessary in the circumstances;

In our opinion, the Statement of Imprest Account and supporting documents and information submitted with them (can/ cannot) be fairly relied on to support the applications for reimbursement/payment in accordance with ADB’s requirements as set out in the Loan Agreement.

STATEMENT OF EXPENDITURE

We have also examined the Statements of Expenditure submitted to ADB during the period in support of applications for liquidation of the Imprest, pursuant to the above-mentioned Loan Agreement. Our examination was made in accordance with generally accepted auditing standards, and, accordingly included such tests of the accounting records, verification of assets and other such auditing procedures as we considered necessary in the circumstances.

In our opinion, the Statement of Expenditures submitted, together with the internal

control and procedures involved in their preparation, (can/cannot) be relied on to support the applications for liquidations in accordance with the requirements of the above mentioned Loan Agreement.

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LOAN COVENANTS

Reference in the Loan Agreement

Major Covenants Deadline for Compliance

Schedule 5, para. 7 Provincial governments will submit to MOH and ADB (a) updated 5-year plans and MTEFs by June 2009, (b) annual provincial health plans and budgets, and (c) annual provincial work plans for the Project. All these are to be based on a format agreed by the parties and will serve as a basis for monitoring performance and allocating funds.

Schedule 5, para. 9 Complementary to project investment, MOH has committed, starting in 2009, to provide additional support for CHSs and for PHC generally to the project provinces.

January 2009

Schedule 5, para. 8

Each province will ensure that the annual HRD plan as developed under output 2 will take into account national policy initiatives, including licensure, certification, and continuing education, and will include targeted strategies to increase th number of female and ethnic minority health workers in targeted communities.

Schedule 5, para. 5 The Government will ensure that ADB loan funds are transferred to MOH and the provincial department of health, that all necessary counterpart funds for project implementation are provided in a timely manner, and that reimbursements are made in a timely manner.

Schedule 5, para. 6 Each province will ensure that the annual budget allocation to the sector fully covers the operation and maintenance of all health facilities, including project-supported facilities, based on projections agreed with MOH.

June 2009

Schedule 5, para. 12

Each province will ensure that the project gender action plan is included in the updated 5-year plan and MTEFs and that specific actions and targets are included in the provincial annual operating plans. Activities identified in each plan will be implemented in a timely manner and have adequate resources allocated for preparation and implementation. Gender-related targets and indicators are included in the project monitoring system. By midterm, each province will develop a provincial health sector gender and ethnic minority development plan, incorporating project lessons.

Schedule 5, para. 14

Each province will ensure that the project ethnic minority strategy is included in the updated 5-year plan and MTEF and that specific actions and targets are included in the provincial annual operating plans. Activities identified in each plan will be implemented in a timely manner and have adequate resources allocated for preparation and implementation. Ethnicity-related targets and indicators are included in the project monitoring system. By midterm, each province will develop a health sector gender and ethnic minority development plan, incorporating project lessons.

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LIST OF ADB REFERENCE MATERIALS ISSUED TO PMU

A. Project Related 1. Report and Recommendation of the President to the Board of Directors 2. Loan Agreement B. Consultants. May be downloaded from the following website: http://www.adb.org/Opportunities/Consulting/Documents.asp 3. Guidelines on the Use of Consultants by ADB and Its Borrowers 4. Handbook for Users of Consulting Services C. Procurement. May be downloaded from the following website:

http://www.adb.org/Opportunities/Procurement/prequalification-bid-documents.asp

5. Guidelines on Procurement under ADB Loans 6. Guide on Bid Evaluation 7. Handbook on Policies, Practices and Procedures Relating to Procurement Under ADB

Loans 8. Handbook on Problems in Procurement for Projects Financed by ADB 9. Standard Bidding Documents: Procurement of Goods (including related services) Single-stage: One-Envelope Single-stage: Two-Envelope Two-stage: Two-Envelope Two-stage User’s Guide 10. Guide on Prequalification of Civil Works Contractors 11. Sample Bidding Documents – Procurement of Civil Works 12. Sample Bidding Documents – Procurement of Civil Works (Small Contracts) 13. Guide on Community Participation in Procurement 14. Contract Awards and Disbursement Projections D. Disbursement 14. Disbursement Letter issued by Controller’s Department 15. Loan Disbursement Handbook E. General – may be downloaded from the following website: www.adb.org/integrity/default.asp 16. Anticorruption Policy 17. Anticorruption Policy: Description and Answers to Frequently Asked Questions 18. Guidelines for Economic Analysis of Projects 19. Ethnic Group Development Plan Framework 20. Environmental Assessment and Review Procedure 21. Handbook on Management of Project Implementation